Part of the surprise in Exxon’s results came from the energy products division, which includes refining. Higher refinery runs and flat U.S. gasoline demand meant refining margins declined 30% compared with the second quarter, but that was partly offset by better trading results. That is worth noting given that U.S. major oil companies tend to be more conservative than European peers. Exxon Chief Executive

Darren Woods

didn’t signal a change in that strategy, noting that trading results can be “noisy” from quarter to quarter.

Meanwhile, natural-gas prices, which rose to record levels in the third quarter, helped both companies post strong upstream results. Chevron said the average sales price of natural gas was $7.05 per thousand cubic feet in the third quarter, more than doubling from a year earlier. Exxon’s natural gas realizations increased 172%, helping its upstream division profits triple from a year earlier. The rally in crude oil prices in the earlier part of the year was also a tailwind for Exxon’s liquefied natural gas-related sales because the majority of its LNG contracts are linked to crude oil prices with a lag of up to six months.

Despite some jaw-dropping numbers, though, Exxon and Chevron’s shares moved only moderately, up by 1.8% and 0.2%, respectively, Friday morning. Investors have a few reasons to be cautious. First, the companies’ results were a reminder that high energy prices are having clear demand impacts around the world. Exxon’s international chemical business, which supplies feedstock to all kinds of factories ranging from tires to electronics, posted weak results. High energy prices are shutting down some factories in Europe, while Covid-19 lockdowns in China are hitting a key demand center in Asia. The company said global chemical margins fell below the bottom of their 10-year historical range.

Secondly, the longer the oil majors’ profits stick out, the tougher the political backlash could be. The U.S. has already floated the idea of banning fuel exports. The companies are clearly cognizant: Exxon’s Mr. Woods devoted two pages of his prepared remarks detailing why the European Union’s windfall taxes on the energy industry will—in the long term—raise energy prices for consumers, and then another two pages applauding the Biden administration’s Inflation Reduction Act for stepping up subsidies for carbon capture and storage.

Exxon and Chevron’s stock prices are at or near record highs at a time when Wall Street is forecasting that peak profit and free cash flow are already behind them. For both companies, the percentage difference between Wall Street analysts’ average target stock price and the actual price—tracked on a quarterly basis—is the narrowest since 2017, according to FactSet.

Reaching the top of a steep climb is certainly nice, but it is also a scarier place to be.

Write to Jinjoo Lee at jinjoo.lee@wsj.com