Oil companies’ profits surge to record levels
NEW YORK
Oil companies swam in record profits over the last few months at a time when Americans struggled to pay for gasoline, food and other necessities.
On Friday, Exxon Mobil booked an unprecedented $17.85 billion profit for the second quarter and Chevron made a record $11.62 billion. The sky-high profits come one day after the U.K.'s Shell shattered its own profit record.
Soaring energy prices have rattled consumers and become a political flash point. Last month, President Joe Biden said that “Exxon made more money than God this year."
Consumers are facing high fuel prices not just at the pump, but soaring energy prices are being baked into delivery costs, which is driving up the cost of everything from apples to toilet paper.
The record profits marked a stunning turnaround from the early days of the COVID-19 pandemic, when cities were locked down and demand for fuels plummeted. There were numerous bankruptcies and thousands of layoffs.
The industry has long gone through boom-andbust cycles. But due to the ongoing war Russia waged on Ukraine, which resulted in less oil and gas on the market from Russia, as well as other global supply constraints, high prices could linger for some time.
Exxon, based in Irving, Texas, increased its oil and gas production as crude prices hovered above $100 a barrel. Revenue at Exxon skyrocketed to $115.68 billion, up from $67.74 billion during the same quarter last year.
Surging prices have been a boon for investors, including energy executives who receive a large share of compensation through company stock. Exxon earned $4.21 per share, exceeding analyst expectations of $4.02 per share, according to analysts polled by Factset. Chevron earned $5.95 per share, exceeding analyst expectations of $5.16 per share.
Shares of Exxon Mobil Corp. jumped 4% at the opening bell Friday and Chevron rose 8%
Gasoline prices rose particularly quickly during the quarter, due to limited global supply, the high cost of oil and because there are fewer refineries operating in the U.S. than before the pandemic.
Exxon plans to increase refining capacity by about 250,000 barrels per day in the first quarter of 2023 by expanding its Beaumont Refinery. That represents the industry’s largest single capacity addition in the U.S. since 2012, the company said.
To alleviate Europe's energy crisis, Exxon sees potential for fracking and unconventional gas in Germany, and “there’s an opportunity where certainly ExxonMobil could play a key role,” CEO Darren Woods said.