Oil giant ExxonMobil has forecast a sharp decline in refining operations amid weak margins in the sector.

The company said refining profits fell between $1.1 billion and $1.5 billion in the second quarter, compared with $1.4 billion in the first quarter. The decline was attributed to lower natural gas prices and weaker demand for refined products.

Despite the decline in refining profits, ExxonMobil expects its strong oil profits, estimated at $700 million, to offset the losses.

ExxonMobil is the first major oil company to release its earnings expectations for the second quarter and is often seen as a bellwether for the health of the refining sector as a whole.

The company’s low expectations suggest that other refiners may face similar challenges in the second quarter.

ExxonMobil’s profits are affected by a variety of factors, including oil and gas prices, demand for refined products, operating costs, refining margins, and geopolitical turmoil such as wars and conflicts.