US oil giants ExxonMobil and Chevron — targets of White House criticism over soaring gasoline costs — reported record quarterly profits Friday amid the war in Ukraine that sparked a steep rise in energy prices.
With crude surging above $100 a barrel shortly after the Russian invasion, and refining margins climbing due to tight global capacity, ExxonMobil scored $17.9 billion in profits and Chevron $11.6 billion in the just-finished second quarter.
The results come on the heels of similarly jaw-dropping figures from European petroleum heavyweights, with Shell reporting $18 billion in profits, TotalEnergies $5.7 billion and Eni $3.8 billion.
ExxonMobil Chief Executive Darren Woods said the strong results “reflect our focus on the fundamentals and the investments we put in motion 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 facing global markets.”
Although gas prices at the pump have dropped in the past month, the massive profits drew criticism from advocacy group Public Citizens, which said on Twitter that “corporate greed is suffocating the working class.”
Progressive US Senator Bernie Sanders of Vermont called for a windfall profits tax.
“While you were feeling pain at the pump, Shell, Exxon and Chevron raked in $46 billion in profits over the last three months and said they would spend up to $47 billion on stock buybacks after spending $18.8 billion so far this year,” sanders said.
– More buybacks –
The latest three months have proved a heady period for the oil industry.
Crude prices traded between $95 and $120 a barrel during the quarter, as the war and the wave of sanctions on Moscow lifted the oil market back to levels last seen in 2008.
The ensuing surge 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 more generally.
In June, Biden notoriously said “Exxon made more money than God this year” as he ripped the industry for spending excess cash on share buybacks instead of significantly boosting capital spending.
On Friday, both companies reported higher oil and natural gas volumes in the United States, with ExxonMobil boosted by an increased 130,000 barrels of oil-equivalent in the Permian Basin in Texas and New Mexico, and Chevron notching a three percent rise in US volumes.
ExxonMobil plans to add 250,000 barrels per day of refining capacity at its Beaumont, Texas plant in the first quarter of 2023, representing “the industry’s largest single capacity addition in the US since 2012,” Woods said in a news release.
Both companies reported big increases in revenues, with ExxonMobil’s jumping 71 percent to $115.7 billion and Chevron 83 percent to $69 billion.
But the two companies, which suffered significant financial losses early in the Covid-19 pandemic as petroleum demand tanked, have not used the mountains of cash from higher prices to significantly lift capital spending, which remains below the level prior to the pandemic.
Instead, the companies have been steering funds to shareholders.
ExxonMobil paid out $7.6 billion in distributions during the quarter, while Chevron lifted the top end of its annual share repurchase range to $15 billion from $10 billion.
Shares of ExxonMobil jumped 4.6 percent to end the day at $96.93, while Chevron leaped 8.9 percent higher to $163.78.
