Chevron just announced its highest quarterly earnings ever. Shell clocked its second-highest quarterly profits. And while ExxonMobil's profits came in beneath what Wall Street analysts had expected, it still managed to double its earnings compared with this time last year.
[...]
Combined, the three companies raked in, on average, some $404 million in profits every day for the last three months.
It's a bonanza for those companies (and for their executives). And it's raising eyebrows and ire among some European lawmakers and Democrats in the U.S. Congress, who are calling for windfall taxes on those companies.
[...]
Those profits came even though Exxon and Shell, in particular, suffered substantial disruption to their operations in the Middle East, which have been directly affected by the war.
Higher crude prices and refining margins were enough to more than offset the blow.
[...]
In the U.S., Sen. Sheldon Whitehouse, D-R.I., has proposed a windfall tax on oil profits; several countries in Europe are also calling for such a tax. (The United Kingdom already has one in place.) Such a tax is designed to harvest "excess" profits that a company rakes in because of outside forces, not because of innovation or outperformance, and it often redirects that money toward the consumers who are having to pay elevated prices for energy.
The European Union imposed a windfall tax on oil profits after prices spiked in 2022 following Russia's full-scale invasion of Ukraine.
In an earnings call on Friday, ExxonMobil CEO Darren Woods told analysts that windfall taxes are a "misguided policy" that penalizes businesses that attempt to be successful despite the oil industry's volatile booms and busts.
"We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax," he said. "And in fact we're suing because we don't think that's a legal taking for the industry."
[...]
But they don't expect this money train to last forever. Woods, of Exxon, told analysts repeatedly that oil from the Middle East is simply too important to the global economy for the current situation to persist.
[...]
That's one reason — among others — that companies aren't racing to start a bunch of new expensive drilling projects to meet the world's current oil appetite. They expect the imbalance to be temporary.
Instead of pouring this cash into new production — or spitting it out to shareholders in fatter-than-expected dividends and stock buybacks — so far, the big oil companies seem more focused on paying down debt and strengthening their own financial situations.
Of course he'd say that. I'd call it war profiteering but hey comme ci, comme ça. This "attempt to be successful" is nothing more than an accidental price hike, not savvy businessing.
In an earnings call on Friday, ExxonMobil CEO Darren Woods told analysts that windfall taxes are a "misguided policy" that penalizes businesses that attempt to be successful despite the oil industry's volatile booms and busts.
Of course he'd say that. I'd call it war profiteering but hey comme ci, comme ça.
This "attempt to be successful" is nothing more than an accidental price hike, not savvy businessing.
From the article:
[...]
[...]
[...]
[...]
[...]
Of course he'd say that. I'd call it war profiteering but hey comme ci, comme ça.
This "attempt to be successful" is nothing more than an accidental price hike, not savvy businessing.