ExxonMobil and Chevron shatter profit records after global oil price surge


ExxonMobil and Chevron smashed profit records within the second quarter because the surging vitality costs that adopted Russia’s invasion of Ukraine delivered a windfall for the US oil supermajors.

The large earnings come as shoppers reel from sky-high gas prices which have helped drive inflation to ranges not seen in a long time throughout the US and Europe, threatening a political backlash towards vitality corporations.

Exxon’s second-quarter internet profit was $17.9bn, beating analysts’ estimates of $16.9bn, in keeping with information compiled by S&P Capital IQ. The earlier document quarterly profit for the corporate was $15.9bn in 2012, one other 12 months of elevated oil costs.

Chevron’s second-quarter profit was $11.6bn, additionally its highest quarterly profit and simply surpassing consensus estimates of $9.9bn.

“The strong second-quarter results reflect a tight global market environment, where demand has recovered to near pre-pandemic levels” and provide has weakened, mentioned Exxon chief government Darren Woods. “This situation was made worse by the events in Ukraine.”

The blockbuster income got here after UK-based Shell on Thursday reported its second consecutive record-breaking quarter with adjusted earnings of $11.5bn. France’s TotalEnergies on the identical day mentioned income within the quarter surged to $9.8bn, nearly triple the identical time a 12 months in the past.

The 5 western oil supermajors — Exxon, Chevron, Shell, BP and TotalEnergies — are collectively on observe to generate effectively over $50bn in income within the three months to the tip of June.

Italian rival Eni on Friday additionally introduced bumper quarterly outcomes, boosting returns to traders after a fourfold year-on-year rise in adjusted internet profit to €3.81bn.

Exxon and Chevron’s “downstream” oil refining companies drove their hovering outcomes after profit margins from promoting refined fuels above the price of shopping for crude oil exploded to document highs.

Peter McNally, analyst at analysis group Third Bridge, mentioned the refining enterprise was the “standout” for Exxon, noting its income practically doubled from the primary quarter regardless of the enterprise being a “political lightning rod”.

In the US, the nationwide common petrol price shot to a document of greater than $5 a gallon in June, though it has since declined.

The outlook for the oil majors has darkened in latest weeks as central banks the world over quickly carry rates of interest to fight inflation, largely due to the consequences of rocketing vitality costs, elevating fears of a global financial slowdown.

While demand softened after petrol costs surged, Woods mentioned the corporate is just not “seeing something that would say we are in a recession, or near-recession”, however he added that it’s a “complex picture”.

The money bonanza for Big Oil has triggered assaults from politicians and introduced widening requires a windfall tax on the income, which corporations face within the UK and elsewhere. US president Joe Biden final month mentioned Exxon was making “more money than God” and promised to “make sure everyone knows Exxon’s profits”.

Exxon and Chevron have responded by arguing that they’re rising spending on new provide to assist meet surging demand. However, their capital spending stays far decrease than previous to the coronavirus pandemic and they’ve prioritised rising dividends and stock repurchases.

Woods touted the corporate’s manufacturing development within the Permian Basin shale oil and gasfields in Texas and New Mexico, which he mentioned is up 130,000 barrels of oil equal a day in comparison with the primary half of 2021. Woods additionally mentioned Exxon will enhance the capability of a Beaumont, Texas, refinery by about 250,000 b/d early subsequent 12 months.

Chevron chief monetary officer Pierre Breber mentioned in an interview he expects the corporate to carry spending subsequent 12 months as the corporate responds to increased demand.

“Our budget this year is around $15bn and our guidance through 2026 is $15bn to $17bn per year, So that gives us $2bn of room to increase . . . you should see higher capital from us in 2023,” he mentioned, pointing to the Permian as an space more likely to have elevated output.

Exxon’s quarterly income elevated by 71 per cent 12 months on 12 months to $115.7bn, whereas Chevron’s rose greater than 80 per cent to $68.8bn. Shares of Exxon gained 4.3 per cent to $96.64 on Friday, whereas Chevron jumped 8.5 per cent to hit $163.22.

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