The oil majors recorded record profits from rising prices: $51 billion

Exxon and BP gas stations at the exit of the Holland Tunnel during the start of the Memorial Day holiday, amid rising prices and record inflation, in Newport, New Jersey, US (REUTERS/Eduardo Munoz/File)

The two largest US oil companies, ExxonMobil and Chevron Corp., reported record revenues on Friday as crude oil and natural gas prices soared.after similar results obtained by their European peers the day before.

The two US companies, along with Britain’s Shell and France’s Total Energy, made nearly $51 billion in the last quarter.nearly double the previous period.

All four have increased Share repurchase in recent monthsBenefiting from the high margins generated from the sale of oil and gas.

Exxon outperformed its competitors with a net profit in the second quarter of $17.9 billionseveral billion from the previous record set in 2012, contributed by the sale of assets in Japan.

Companies get good results in their production units with the help of Brent crude futures rise which averaged about $114 a barrel this quarter.

(AFP)
(AFP)

Higher crude oil prices may reduce the margins of the integrated major oil companies, as they also bear the cost of crude used in refined products.

However, after the Russian invasion of Ukraine and the shutdown of many refineries around the world due to the coronavirus pandemic, Refining margins increased in the second quarteroutperforming crude oil gains, consolidating gains.

It will certainly raise the results of the major oil companies Criticisms from politicians and consumer advocates, who say oil companies are exploiting global supply shortages to inflate profits and deceive consumers.

US President Joe Biden said last month that Exxon and other companies were making “more money from God”.“At a time when consumer fuel prices are at record levels.

Gasoline prices are posted at a Chevron station as rising inflation and oil costs hit consumers in Los Angeles, California, US, June 13, 2022. REUTERS/Lucy Nicholson
Gasoline prices are posted at a Chevron station as rising inflation and oil costs hit consumers in Los Angeles, California, US, June 13, 2022. REUTERS/Lucy Nicholson

earlier this month, The UK has issued a 25% tax on oil and gas producers in the British North Sea. US lawmakers have debated a similar idea, although the chance of it succeeding in Congress is slim.

Exxon chief financial officer Catherine Michaels said in an interview with Reuters that the windfall tax is not “an incentive to increase production, which is what the world really needs today.”

Companies claim to only meet consumer demand, and that Prices are a function of global supply problems and underinvestment.

The major oil companies have been disciplined with their capital and are reluctant to increase capital spending due to pressure from investors who want better returns during a downturn.

In the short term (oil money) it goes to the balance sheet. “There’s nowhere else I can go,” Chevron chief financial officer Pierre Breber told Reuters.

(AFP)
(AFP)

Global oil production has been hampered by the slow return of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to the market, as well as labor and equipment shortages in countries such as the United States.

Earlier this year, Exxon more than doubled its planned buyback program to $30 billion through 2022 and 2023. Shell said it would buy back $6 billion of stock in the current quarter, while Chevron raised it to a range of $10 billion to $15 billion of . From 5 to 10 billion dollars.

(With information from Reuters)

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