The US’s biggest oil companies pumped out record profits over the last few months as Americans struggled to pay for gasoline, food and other basic necessities.
On Friday, ExxonMobil reported an unprecedented $17.85bn (£14.77bn) profit for the second quarter, nearly four times as much as the same period a year ago, and Chevron made a record $11.62bn (£9.61bn). The sky-high profits were announced one day after the UK’s Shell shattered its own profit record.
Soaring energy prices have rattled consumers and become a political flashpoint. “We’re going to make sure everybody knows Exxon’s profits,” Joe Biden said in June. “Exxon made more money than God this year.”
The record profits came after similarly outsized gains in the first quarter when the largest oil companies made close to $100bn in profits.
High energy prices are one of the leading factors driving inflation to a four-decade high in the US. Gas prices have fallen slightly in recent weeks but are now averaging $4.25 a gallon across the US, more than $1 a gallon higher than a year ago.
Consumers are facing high fuel prices not just at the pump. Soaring energy prices are being baked into delivery costs, which is driving up the cost of everything from apples to toilet paper.
One reason gasoline prices have been so high is that fewer refineries are operating in the US than before the pandemic, so there is a limit to how much gasoline can be produced.
Biden has called for the companies to increase production and refining capacities in an attempt to bring down prices. On Friday Exxon said it was expanding refinery and production in Texas and New Mexico.
Exxon, based in Irving, Texas, increased its oil and gas production as crude prices hovered above $100 a barrel. Revenue at Exxon soared to $115.68bn, up from $67.74bn during the same quarter last year.
Natural gas and liquefied natural gas (LNG) prices are also elevated due to Russia’s invasion of Ukraine and ensuing sanctions against Russia, a large supplier of natural gas. Many European nations have been scrambling for alternatives to Russian natural gas, and have been competing for boatloads of LNG, driving up prices for natural gas globally and in the US.
In addition to oil company executives, shareholders also reaped the benefits of high energy prices during the quarter. Since the start of 2022, Exxon and Chevron shares have risen close to 46% and 26%, respectively.
Exxon’s 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 has been in high demand globally.
“We’re also helping meet increased demand by expanding our refining capacity by about 250,000 barrels per day in the first quarter of 2023 – representing the industry’s largest single capacity addition in the US since 2012,” Woods said in a prepared statement.
Chevron’s chief executive officer, Mike Wirth, sought to tamp down criticism that the company was profiteering at the expense of consumers.
“We more than doubled investment compared to last year to grow both traditional and new energy business lines,” Wirth said in the statement. “Chevron is increasing energy supplies to help meet the challenges facing global markets,” he said.
Exxon and Chevron’s bumper profits were announced a day after Shell posted record earnings 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 “eye-watering profits” “an insult to the millions of working people struggling to get by because of soaring energy bills.
“Working people are facing the longest and harshest wage squeeze in modern history. It’s time working people got their fair share of the wealth they create, starting with real action to bring bills down,” said O’Grady.
Associated Press contributed to this story