Over the past six months, oil giants have raked in record profits when many Americans struggled to pay for food, petrol, and other essentials. Exxon Mobil reported a second-quarter profit of an unprecedented $17.85 billion on Friday, while Chevron reported a record $11.62 billion profit.
The staggering gains come one day after Shell of the United Kingdom broke its profit record. Consumers are alarmed by the rising cost of electricity, which has also become a political flashpoint. President Joe Biden stated in a statement delivered last month that “Exxon made more money than God this year.”
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In addition to paying high fuel prices at the pump, consumers are also paying higher delivery fees due to the rising cost of electricity, which raises the price of everything from apples to toilet paper. In contrast to the early stages of the COVID-19 pandemic, when cities were shut down, and gasoline demand plunged, the record profits represented a startling turnaround.
There were thousands of layoffs and countless bankruptcies. Mark Wolfe, executive director of the National Electricity Assistance Directors Association, described the situation as “devastating” and noted that low-income families and frontline employees were particularly hard-hit by the high energy cost. You have a limited budget.
Thus, this would add $40 to $50 per week. According to Wolfe, energy firms should pay taxes and want to “redistribute part of those profits back to the families that are struggling.” Where Americans go and what they eat are already shifting due to inflation. Additionally, it is altering how they use energy.
According to Andrew Gross, spokesman for AAA, two-thirds of Americans modified their lifestyle and driving practices, with the vast majority deciding to travel less or combine errands. According to the AAA study, 2% of respondents claimed they had purchased an electric vehicle in March.
According to Gross, “they have changed their lifestyles to deal with these exorbitant expenditures.” The Irving, Texas-based Exxon Company raised its oil and gas output while crude prices remained above $100 per barrel. Exxon’s revenue increased dramatically, from $67.74 billion in the same quarter last year to $115.68 billion this quarter.
Due to sanctions placed on Russia, a major natural gas supplier, the price of natural gas and liquefied natural gas (LNG) has also increased due to its invasion of Ukraine. As many European countries compete for boatloads of LNG and seek alternatives to Russian natural gas, the price of natural gas has risen internationally and in the United States. The cost of electricity has been rising along with the inflation in Europe.
Rising prices have benefited investors, notably energy executives who receive a significant portion of their pay from firm stock. According to analysts surveyed by Factset, Exxon earned $4.21 per share, beating analyst expectations of $4.02 per share. Chevron made $5.95 per share, beating analysts’ $5.16 per share estimate.
Friday’s opening bell saw a 4 percent increase in Exxon Mobil Corp. shares and an 8 percent increase in Chevron. Exxon CEO Darren Woods credited the company’s investments in liquefied natural gas, which has been in high demand worldwide, and oil and gas assets in Guyana and the Permian Basin for its success.
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Growing supply “won’t happen overnight given the extended investment cycle times,” Woods said in a conference call on Friday. Due to the tight worldwide supply, the high cost of oil, and the fact that fewer refineries are working in the United States than there were before to the epidemic, gasoline prices increased remarkably quickly during the quarter.
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