Oil groups. getting the most profit amid the consumer squeeze | News, Games, Jobs | So Good News
Major oil companies saw profits rise in the third quarter of 2022, continuing the company’s biggest profit even as Russia’s invasion of Ukraine pushes up prices for consumers.
Exxon Mobil on Friday morning reported earnings of more than $19.7 billion for the quarter, while Shell reported the second highest at $9.5 billion.
Exxon Mobil’s second-quarter profit topped $17.9 billion for the second quarter, beating estimates by nearly $4 billion. The company said in the order that its profit was boosted by the Permian Basin’s oil and gas production, about 560,000 barrels per day.
Shell, meanwhile, announced a $9.5 billion quarterly profit the day before. Chevron also beat expectations, earning $11.2 billion in the third quarter, its second-highest quarter ever.
Exxon has been able to combat the oil price shocks mainly through exports of natural gas (LNG). Demand for LNG has increased in Europe after the EU ended exports from Russia. As a result, companies in the US took advantage of this opportunity.
News of the increased profits comes after accusations from Democrats, including President Biden, that companies are chasing consumers away from the tap.
The latest findings could intensify opposition to the Democratic Party with 2022 just weeks away.
The President’s actual power against corporations is limited.
But Mr. Biden and congressional Democrats often try to point to the oil industry’s boom and bust in Ukraine as part of high oil prices because voters, rightly or wrongly, tend to blame pain at the pumps on the party’s side.
Biden has repeatedly urged companies to cut consumer prices based on their earnings, especially since the OPEC+ bloc announced it would cut oil production.
On Thursday, the president criticized Shell’s announcement that it will buy another $4 billion in the region for the rest of the year.
“That’s more than what they made in the third quarter of last year. And they’ve also raised their capital, so the profits are going back to the owners instead of going to the pump and lowering prices,” Biden said Thursday in a speech in Syracuse, NY
The president also took aim at Exxon on Twitter after CEO Darren Woods defended the company’s quarterly dividend to return its profits to customers.
“I don’t believe I have to say this but giving profits to owners is not the same as lowering prices for American families,” he said. President Biden’s Twitter account tweeted.
The Democrats in Congress, meanwhile, called for a tax benefit to the big oil companies during the summer, when the prices of the purchased gas are rising.
“Not in the legal sense, but in the public mind, what’s going on with the refined products, the profit and the margin is probably going to be like an eagle,” Tom Kloza, global chief energy analyst at the Oil Price Information Service, told The Hill in an interview.
“The optics are terrible,” Kloza added. “The benefits that have been written … are not really appreciated by people who say, hey, we need a break from inflation.”
Also, he said, “If you had a map of what happened right now in the month of October, which is outside of the third quarter of profits, the numbers are not just off the charts, they’re off the wall. On.”
Patrick DeHaan, head of fuel analysis at GasBuddy, said most fuel prices are outside of the oil industry.
“They can choose to raise production or not, and if they raise production that will reduce prices, but at the moment, the profits of the oil companies are a sign of the imbalance that exists in the oil markets,” he said. he said. “That is, everyone wants oil and refined products and there is not enough to go around.”
The oil industry is also easily destroyed “too much to lose” in situations that cause people to go missing, such as at the beginning of the COVID-19 pandemic, he said.
“When the flow is good, it is very good, and when it is bad, it is very bad,” he said.
Going forward, Kloza predicted, “I think we’re entering a chapter where the high oil prices, which the White House is focused on … won’t really go down, but they’ll go off the front page.”
Instead, he added that the prices of things like diesel fuel and heating oil may be moving in the winter.
Earlier this year, Energy Secretary Jennifer Granholm called on major oil producers to reduce exports of refined products ahead of hurricane season and cold weather.
“I urge you to focus immediately on manufacturing in the United States, instead of selling existing stocks and increasing exports,” he said.
In response, however, Exxon CEO Woods pushed back against Granholm to downplay exports as beneficial to consumers.
“Continued Gulf Coast exports are essential for market recovery – especially with Russian products in disarray,” Woods wrote in September, according to The Wall Street Journal. “Decreasing global supply by reducing U.S. exports to regional production will only increase the global deficit.”
Democrats in the party’s progressive ranks have called on the administration to take strong action or they want to do it themselves.
During the summer gas price increase, Rep. Ro Khanna (D-Calif.) and Sen. Sheldon Whitehouse (D.R.I.) introduced legislation to tax profits for oil companies, with the money going back to taxpayers. California Gov. Gavin Newsom (D) called for a similar tax in the Golden State, which has the highest gas prices.
On Friday morning, Khanna introduced another bill that would ban the export of refined gas for seven days when domestic oil prices are $3.12 or higher.
The bill may not pass, but the ban will go far beyond what Granholm requested in his August letter.
A Shell spokesperson referred The Hill to testimony at the meeting where President Gretchen Watkins said, “Because oil is a global commodity, Shell does not set or regulate the price of crude oil. Similarly, Shell does not set or control the price that consumers pay. Indeed, it would not be permissible for Shell to do so because almost all Shell stores in the United States are owned by independent companies that set their prices on the market. “
An Exxon spokesperson, meanwhile, told The Hill, “The investments we’ve made over the past five years, including the downturn in the pandemic, are driving the results (Q3 results). Our North American refineries set a record production volume at a time when the world needs our products the most. Globally, our factories have produced best since 2008.”