Oil giants rake in record profits as energy prices remain high

Oil companies are reporting surging profits as energy prices remain elevated.

Exxon Mobil broke records with its profits in the third quarter, raking in $19.7 billion in net income, a nearly $2 billion increase from its second quarter. The Irving, Texas, company said Friday that it booked $112 billion in quarterly revenue, more than double what it brought in during the year-ago period.

In August, President Joe Biden said “Exxon made more money than God this year.” The president’s rebuke came a month before Exxon Mobil booked what was then an unprecedented $17.8 billion profit in the second quarter. 

In its most recent quarter Chevron notched a record $11.2 billion in profits on revenue of $66.6 billion.

The high cost of energy has hit consumers in multiple ways. Americans, especially low-income workers, have struggled with painfully high fuel costs in recent months. High energy prices also hit manufacturers and retailers, who often pass on those costs to customers in the form of higher prices for food, clothing and other goods.

Across the U.S., some families are looking to the winter with dread, with the Department of Energy projecting sharp price increases for home heating. 

Gas prices have eased in more recent months, but customers are still paying an average of more $3.76 for a gallon of regular, up from $3.40 a year ago, according to data from AAA.

Increased oil and gas production

Exxon boosted production of gasoline and oil during the quarter to meet growing demand. It had its best-ever refinery output in North America and its highest globally since 2008, the company said. And it produced 3.7 million barrels of oil or oil-equivalent per day, and had record production in the Permian Basin, the most productive oil field in the U.S.

The investments Exxon made, even during the pandemic, enabled the company to increase production to meet the needs of customers, said CEO Darren Woods in a conference call with investors.

“Where others pulled back in the face of uncertainty and a historic slowdown, retreating and retrenching, this company move forward, continuing to invest and build to help meet the demand we see today and position the company for long term success in each of our businesses,” Woods said.

Natural gas prices have also been high, especially as demand for liquefied natural gas has remained strong globally. The U.S. has been increasingly exporting liquefied natural gas to Asia and Europe, especially as supply of Russian natural gas declined after Russia invaded Ukraine and prices skyrocketed. Woods listed inventory concerns as one of the reasons American natural gas prices rose by 15% during the quarter.

To help meet growing demand, Exxon is expanding its oil refinery in Beaumont, Texas, and expects the additional refined product to become available in early 2023.

American oil companies aren’t the only ones benefiting from high energy prices. European energy giants Shell and TotalEnergies reported huge profits Thursday. That fueled calls to tax the profits of energy producers which have benefited from high oil and natural gas prices following Russia’s invasion of Ukraine, even as Europe heads into winter during an energy crisis.