US oil giants ExxonMobil and Chevron – targets of White House criticism over rising gas costs – reported record quarterly profits on Friday amid the war in Ukraine that has sparked a spike in energy prices.
With crude oil prices above $100 a barrel just after the Russian invasion and refining margins rising due to tight plant capacity, ExxonMobil posted a profit of $17.9 billion and Chevron $11.6 billion in the just ended second quarter.
The results follow similarly stunning figures from European oil industry heavyweights, with Shell reporting profits of US$18 billion, TotalEnergies US$5.7 billion and Eni US$3.8 billion.
ExxonMobil chief executive Darren Woods said the strong results “reflect our focus on fundamentals and the investments we embarked on several years ago and sustained through the depths of the pandemic.”
Chevron Chief Executive Mike Wirth said the company is “increasing energy supplies to help meet the challenges of global markets.”
Although gasoline prices at the pump have fallen over the past month, the massive gains have been criticized by advocacy group Public Citizens, which said on Twitter that “corporate greed is stifling the working class.”
Progressive US Senator Bernie Sanders from Vermont called for a windfall profits tax.
“While feeling pain at the pump, Shell, Exxon and Chevron have all tucked in $46 billion in earnings over the past three months and announced they will spend up to $47 billion on share buybacks after hitting so far this year spent $18.8 billion,” Sanders said.
– More buybacks –
The past three months have proven to be an exciting time for the oil industry.
Crude oil prices traded between $95 and $120 a barrel during the quarter as the war and wave of sanctions against Moscow pushed the oil market back to 2008 levels.
The subsequent rise in US gasoline prices to an all-time high in mid-June has squeezed American families and pressured President Joe Biden, who has had a fractious relationship with ExxonMobil and Chevron and the oil industry in general.
In June, Biden notoriously said, “Exxon made more money than gods this year” as he berated the industry for spending excess money on share buybacks rather than significantly boosting capital spending.
On Friday, both companies reported higher oil and natural gas volumes in the United States, with ExxonMobil reporting an increase of 130,000 barrels of oil equivalent in the Permian Basin in Texas and New Mexico and Chevron reporting a three percent increase in US volumes.
ExxonMobil plans to add 250,000 barrels per day of refining capacity at its Beaumont, Texas facility in the first quarter of 2023, which represents “the industry’s largest single capacity addition in the U.S. since 2012,” Woods said in a release.
Both companies reported big increases in revenue, with ExxonMobil up 71 percent to $115.7 billion and Chevron up 83 percent to $69 billion.
But the two companies, which suffered significant financial losses early in the Covid-19 pandemic as oil demand slacked, have failed to use the cash piles from higher prices to significantly boost capital spending, which is below pre-pandemic levels.
Instead, companies have diverted funds to shareholders. ExxonMobil paid out $7.6 billion in dividends for the quarter, while Chevron raised the high end of its annual share buyback range to $15 billion from $10 billion.
ExxonMobil shares were up 4.1 percent to $96.39 in midday trading, while Chevron was up 8.5 percent to $163.19.
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