Quick Verdict
ExxonMobil (XOM) is generally considered HALAL under Islamic screening methodologies. Oil and gas extraction, refining, and distribution are not inherently prohibited activities. Exxon passes both the business activity screens and financial ratio tests used by major Islamic screening agencies.
Is Oil & Gas Inherently Halal?
Yes. Extracting natural resources, refining them, and selling fuel and petrochemicals is a permissible commercial activity. There is no riba element, no production of prohibited goods, and no gambling component. The Gulf states — home to the world's most prominent Islamic finance institutions — have oil and gas as their primary economic activity.
The question isn't whether oil is halal, but rather whether specific companies pass the financial ratio screens.
Financial Screening
- Debt / Market Cap: ~10% ✅
- Interest Income / Total Revenue: Under 1% ✅
- Haram Revenue / Total Revenue: Near zero ✅
- Cash-Based Receivables / Total Assets: Within limits ✅
Environmental Concerns
Some Muslim investors raise environmental concerns about fossil fuel companies, drawing on Islamic principles of khalifa (stewardship of the Earth) and avoiding harm (la darar). This is a valid ethical consideration, though it doesn't constitute a standard Sharia screen failure.
If environmental stewardship is a priority for you, you can align your portfolio with Islamic ESG principles by preferring clean energy companies while still holding energy sector exposure through ETFs.
Screening Agencies' Verdict
- Zoya App — Compliant ✅
- MSCI Islamic Index — Included ✅
- Many halal ETFs — Held ✅
Bottom Line
ExxonMobil passes mainstream Islamic screening. Oil and gas investment is permissible — the activity of energy production isn't prohibited. Exxon's strong dividend history also makes it relevant for Muslim investors interested in halal passive income. Environmental considerations are worth reflecting on, but they're personal ethics choices rather than Sharia compliance requirements.
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