Despite High Gas Prices, Big Oil Brought in over $46 Billion Total Earnings Last Quarter

Major energy companies have amassed record cash as the average consumer grapples with rising gas prices.

Shell, Chevron and ExxonMobil posted $46 billion in earnings in the second quarter, according to reports from last week and NBC News.

Energy prices have risen enormously this year, mainly due to Russia’s invasion of Ukraine, the News from New York reported This has helped fuel inflation and squeezed consumers around the world, and not everyone is happy that companies are making sky-high earnings.

Chevron reported $11.6 billion in earnings on Friday, citing higher refinery margins among other factors. Shell reported adjusted earnings of $11.5 billion, which stripped out some price changes and one-time expenses, but with supplies included, the company reported $16.7 billion, according to NBC.

However, ExxonMobil was the real winner, bringing in $17.9 billion, which Reuters reported was a record for the company. Chevron and Shell also broke company records, according to Reuters and the NYT.

Exxon CEO Darren Woods, in an interview with CNBC on Friday, attributed the company to investing more while competitors focused on getting money back from investors, according to Seeking Alpha.

“What we’re seeing today is that extra production that we invested in five years ago and since then we’re in a position to bring more product to market,” he told CNBC.

The record revenue figures for energy companies came from increased demand after Russia invaded Ukraine in February. The EU has sought to limit dependence on Russian energy, and Russia itself has also been reducing natural gas deliveries. Sixty-two percent of total EU imports from Russia in 2021 were energy-related, for perspective.

Beyond that, demand for air and car travel rebounded after the low prices of the pandemic era. In the US, the highest national average on record for a gallon of gas was $5.016 in mid-June, according to AAA.

That number is down to $4,212 on Monday, but the organization released a statement on Monday saying the lower prices could lead consumers to drive more again, making the drop in prices temporary.

It has been tough on consumers. One family told CBS News in mid-July that they were taking out short-term, high-interest loans to pay for gas to get their son to cancer treatments.

There have also been some political complaints. The UK has a 25% windfall tax on energy companies in the works, which energy companies have opposed, according to Reuters.

London-based Shell’s Sinead Gorman said on the company’s earnings call Thursday that it would likely cost the company $420 million next quarter. But similar things probably won’t happen in the US, NBC reported.

Shell, Exxon and Chevron did not respond to requests for comment on the tax ideas or to confirm whether profits broke records.

Oil analyst Andy Lipow told NBC part of why gas prices tend to upset consumers more is because they’re so visible. Oil companies “still make less than Google or Apple,” he told the outlet. “No one complains about $1,300 iPhones.”

Chevron reported a new share buyback program and Shell increased its current one in the second quarter, something companies tend to do when they’re performing well. They increase the value of the outstanding shares, as well as the confidence of the project in the market.

Shell claimed the profits would support more environmentally positive initiatives. “We are using our financial strength … to reduce carbon emissions and [transform] our company for a low-carbon energy future,” Shell plc CEO Ben van Beurden said in a statement accompanying the earnings release.

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