- ExxonMobil, Chevron, and Shell reported combined earnings of $46 billion for the second quarter.
- Gas prices surpassed the national average of more than $5 per gallon.
- Oil industry analyst Andy Lipow: “Higher energy prices are here to stay”.
The second quarter saw record earnings for major Western oil firms and gas prices that had surpassed the national average of more than $5 per gallon.
According to earnings reports from the three firms, ExxonMobil, Chevron, and Shell reported combined earnings of $46 billion for the second quarter. Exxon claimed earnings of $17.9 billion, while Chevron stated that it made $11.6 billion.
When the price of supplies is taken into account, the London-based Shell reported earnings of $16.7 billion. Its adjusted earnings for the quarter, which do not include one-time costs or certain price changes, were $11.5 billion.
The stock prices of ExxonMobil and Chevron are currently a few dollars below their year-to-date highs as a result of the corporations’ commitments to expand stock buybacks and reduce debt in order to reward shareholders.
Amid challenges brought on by the ongoing conflict in Ukraine, the corporations claim they intend to use their revenues to expand their energy sources.
Chevron CEO Mike Wirth said in a statement that “we more than doubled investment compared to the previous year to grow both traditional and emerging energy business lines.” Chevron is expanding its energy supply in order to help the world’s markets overcome their issues.
The companies’ financial success has turned into a political hot potato. President Joe Biden issued a warning last month even before the second quarter financial data were released: “We’re going to make sure everyone knows Exxon’s profits… Exxon made more money than God this year.”
An increasing number of progressive lawmakers are advocating for a corporate windfall profit tax, similar to the one that was just passed in the UK.
It’s time for our tax code to reward working families — not oil execs getting rich from record profits and buying back stock. Next week I’ll be introducing my legislation to ensure these corporations start paying their fair share. https://t.co/U2BN5t0UIk
— Ron Wyden (@RonWyden) July 29, 2022
I’m pushing to pass the Big Oil Windfall Profits Tax to take Big Oil’s record profits and turn them into rebate checks for the hardworking Americans being ripped off by Big Oil’s price gouging. It’s not enough to talk about it—we need to act. Now. pic.twitter.com/8c7zHZvcUD
— Senator Jeff Merkley (@SenJeffMerkley) July 21, 2022
These initiatives, however, are not likely to receive widespread approval. The Inflation Reduction Act, which is presently being discussed in Congress, asks for augmenting fossil fuel supplies while also including tax incentives for renewable energy investments.
U.S. Sen. Joe Manchin (D-W.Va.), the bill’s chief proponent, said in a statement this week that “the greater danger of geopolitical uncertainty necessitates that we redirect our focus to expanding U.S. energy output and returning decent paying energy and manufacturing jobs back to America.” “While this may seem like plain logic, the Administration’s present answer is to advance more expensive rules that lead to lower U.S. output while puzzlingly encouraging other countries to pump more oil,” the statement reads.
According to oil industry analyst Andy Lipow, it’s important to put the rising profits that oil corporations are reporting in perspective.
They continue to earn less than Apple or Google, he told NBC News. Lipow compared the price of an Apple iPhone to a gas price display and stated, “No one is moaning about $1,300 iPhones, but the difference is, you don’t see the price of an Apple iPhone on a corner store with 12-inch numbers.
And he added that Americans should anticipate the current situation, which includes high oil company profits and rising gas costs, to continue.
He declared, “Higher energy prices are here to stay. “Gasoline prices are falling down, and we may even see the national retail average fall to $4 gallon in October, but we’re not going back to $3 or $2.50 or even less, as we would have been in a pandemic when demand was down 20% or 30%. These businesses will continue to be very profitable.
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