America’s biggest oil companies have made record profits in recent months as Americans struggled to afford gasoline, food and other basic necessities.
On Friday, ExxonMobil reported record second quarter profit of $17.85bn (£14.77bn), nearly four times the same period a year ago, and Chevron made a record $11.62 billion (£9.61 billion). The sky-high profits were announced a day after UK-based Shell broke its own profit record.
Soaring energy prices have rattled consumers and become a political flashpoint. “We’re going to make sure everyone knows Exxon’s earnings,” Joe Biden said in June. “Exxon has made more money than God this year.”
The record profits came after similarly outsized gains in the first quarter, when the biggest oil companies made nearly $100 billion in profits.
High energy prices are one of the main factors pushing inflation to its highest level in four decades in the United States. Gasoline prices have fallen slightly in recent weeks, but are now averaging $4.25 a gallon in the United States, more than $1 a gallon higher than a year ago.
Consumers face high fuel prices, not just at the pump. Soaring energy prices are baked into delivery costs, driving up the cost of everything from apples to toilet paper.
One of the reasons gasoline prices are so high is that there are fewer refineries operating in the United States than before the pandemic, so there is a limit to how much gasoline can be produced.
Biden called on companies to increase production and refining capacity in an attempt to lower prices. On Friday, Exxon announced it was expanding its refinery and production in Texas and New Mexico.
Exxon, based in Irving, Texas, increased its oil and gas production as crude prices surged above $100 a barrel. Exxon’s revenue climbed to $115.68 billion from $67.74 billion in the same quarter last year.
Natural gas and liquefied natural gas (LNG) prices are also high due to Russia’s invasion of Ukraine and subsequent sanctions against Russia, a major natural gas supplier. Many European countries have scrambled to find alternatives to Russian natural gas and competed for LNG shipments, driving up natural gas prices globally and in the United States.
In addition to oil company executives, shareholders also benefited from high energy prices during the quarter. Since the start 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 around the world.
“We are also helping to meet increased demand by increasing our refining capacity by approximately 250,000 barrels per day in the first quarter of 2023, which represents the industry’s largest single capacity addition in the United States since 2012.” , Woods said in a prepared statement.
Chevron CEO Mike Wirth sought to stifle criticism that the company was making profits at the expense of consumers.
“We have more than doubled our investments compared to last year to develop both traditional and new energy businesses,” Wirth said in the statement. “Chevron is increasing its energy supplies to help meet the challenges facing global markets,” he said.
Exxon and Chevron’s windfall profits were announced a day after Shell posted a record profit of $11.4bn (nearly £10bn) for the three-month period from April to June.
Frances O’Grady, the general secretary of Britain’s Trades Union Congress, called the “extortionate profits” an “insult to the millions of workers struggling to get by on soaring energy bills.”
“Workers are facing the longest and toughest wage squeeze in modern history. It’s time workers got their fair share of the wealth they create, starting with real action to lower bills,” O’Grady said.
Associated Press contributed to this story