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Energy giants to smash annual profit records

U.S. President Joe Biden has previously singled out Exxon Mobil for making “more money than God” last year.

Brandon Bell | Getty Images

Some of the world’s largest oil and gas companies are poised to report record annual profits, raking in extraordinary revenues following a year of volatile fossil fuel prices amid Russia’s onslaught in Ukraine.

Oil majors Exxon Mobil, Chevron, BP, Shell and TotalEnergies are slated to report a combined profit of $190 billion for 2022 when their final quarterly results are released in the coming days, according to estimates from analysts collated by Refinitiv.

Flush with cash, the energy giants are expected to use their windfall profits to reward shareholders with higher dividends and share buybacks.

U.S. President Joe Biden has previously accused oil companies of reaping a “windfall of war,” while simultaneously refusing to help lower gas prices at the pump for American consumers. In June last year, Biden singled out Exxon Mobil for making “more money than God.”

Exxon Mobil spokesperson Erin McGrath told CNBC higher energy prices are “largely as a result of a supply-demand imbalance” and that it is the firm’s investments over the last five years that are driving quarterly results.

McGrath said Exxon sees its success “as an ‘and’ equation, one in which we can produce the energy and products society needs — and — be a leader in reducing greenhouse gas emissions from our own operations and also those from other companies.”

Spokespeople for BP and Shell did not wish to comment ahead of full-year results, while Chevron and TotalEnergies did not respond when contacted by CNBC.

In recent quarters, Big Oil executives have said the significant disruption to global energy markets due to the war in Ukraine has reaffirmed the importance of helping to solve “the energy trilemma.” This, according to a statement to investors from BP CEO Bernard Looney late last year, refers to “secure, affordable and lower carbon energy.”

“They are profiting from the current increase in oil and gas prices, and they are betting on it. And what you see is actually increased investment in oil and gas,” Agathe Bounfour, oil campaign lead at the NGO Transport & Environment, told CNBC via telephone.

“I think given that prices of oil and gas are likely to stay up, it’s important for us to reflect on the fact that these profits are going to stay high at the same time as many households are struggling with energy prices,” Bounfour said.

“There’s not much point [in] raising revenues and subsidizing the industry at the same time,” she added.

‘The year the empire struck back’

The Big Oil profits are seen from within the industry as something of a vindication. The energy giants came under immense pressure from shareholders and activists to invest in clean energy as oil demand cratered in the peak of 2020 lockdowns.

The push toward green reform lost momentum last year, however.

The oil and gas industry has sought to underline the importance of energy security amid…

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Energy giants to smash annual profit records

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