The largest US oil companies have been pumping in record profits over the past few months as Americans struggled to pay for gasoline, food and other basic necessities.
On Friday, ExxonMobil reported an unprecedented $17.85 billion (£14.77 billion) profit for the second quarter, nearly four times the same period last year, and Chevron posted a record $11.62 billion (£9.61 billion) ). Exorbitant profits were announced one day after the British Shell company was smashed profit record.
Rising energy prices alarmed consumers and became a political flashpoint. “We’re going to make sure everyone knows about Exxon’s earnings,” Joe Biden said in June. “Exxon earned more money than God this year.”
The record profits came after similar huge gains in the first quarter, when the largest oil companies achieved Nearly $100 billion in profits.
High energy prices are one of the main factors driving inflation to its highest level in four decades in the United States. Gas prices have decreased slightly in recent weeks but have fallen Average of $4.25 per gallon in the US, that’s $1 more per gallon than it was a year ago.
Consumers are faced with rising fuel prices not only at the pump. Higher energy prices are factored into delivery costs, driving up the cost of everything from apples to toilet paper.
One reason gasoline prices are soaring is that there are fewer refineries operating in the United States than there were before the pandemic, so there is a limit to the amount of gasoline that can be produced.
Biden called on companies to increase production and refining capacities in an attempt to lower prices. Exxon said Friday it is expanding a refinery and production in Texas and New Mexico.
Exxon, based in Irving, Texas, increased its oil and gas production as crude oil prices were hovering above $100 a barrel. Revenue at Exxon increased to $115.68 billion, compared to $67.74 billion during the same quarter last year.
Natural gas and LNG prices also rose due to the Russian invasion of Ukraine and the ensuing sanctions against Russia, a major natural gas supplier. Several European countries are scrambling for alternatives to Russian natural gas, competing for boatloads of LNG, driving up natural gas prices globally and in the United States.
In addition to oil company executives, shareholders also reaped the benefits of higher energy prices during the quarter. Since the beginning of 2022, Exxon and chevron Shares are up nearly 46% and 26%, respectively.
Exxon CEO Darren Woods attributed the company’s success to its investments in oil and gas fields in Guyana and the Permian Basin, as well as its investments in liquefied natural gas, which is in high demand globally.
“We are also helping meet increased demand by expanding our refining capacity by about 250,000 barrels per day in the first quarter of 2023 — the single largest addition to the US industry since 2012,” Woods said in a prepared statement.
Chevron CEO Mike Wirth sought to mitigate criticism that the company was profiting at the expense of consumers.
“We have more than doubled investment compared to last year to grow our conventional and new energy lines of business,” Wirth said in the statement. “Chevron is increasing energy supplies to help meet the challenges facing global markets,” he said.
Exxon and Chevron’s bumper earnings announced a day after Shell posted profit recording $11.4 billion (nearly £10 billion) for the three-month period from April to June.
Francis O’Grady, General Secretary of the Trade Union Congress of Britain, called the name “Amazing Profits” “An insult to the millions of workers who are struggling to make ends meet due to high energy bills.
Workers face the longest and harshest wage pressures in recent history. It’s time for workers to get their fair share of the wealth they make, starting with the real business of cutting bills,” O’Grady said.
The Associated Press contributed to this story