As households around the globe struggle with rising energy bills, some of the world’s leading oil giants reported record profits for the first three months of this year.
Profits for Exxon Mobil, Shell and more also rose by billions despite significant costs of exiting operations and/or investments in Russia amid war in Ukraine.
After Russia invaded Ukraine in February, the price of oil climbed in 2022’s first quarter – as countries that rely heavily on Russia for energy scrambled for alternative fuel sources amid uncertainty.
The benchmark for global oil prices, Brent crude, averaged at $102.23 a barrel during the first quarter – 67% higher than during the same period last year, according to the Associated Press. In the United States, for example, drivers have consequently found increasingly expensive gas prices at the pump.
Home heating bills and electricity prices also inflated worldwide – as natural gas prices climbed from $3.50 per million British thermal units to about $5.60.
High oil and gas prices have boosted the profits of major energy companies, further contributing to global inflation and the cost-of-living crisis.
The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, in the first quarter has been running at 12.3% based on estimates and earnings reported so far, according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of about 11%.
“Profit margins should be coming down,” Lindsay Owens, executive director of Groundwork Collaborative, a progressive economic policy research group, previously told USA TODAY.
Instead, she noted, “they’re actually growing.”
Here’s a breakdown of the profits and earnings some of the world’s oil giants made in the first three months of 2022:
Shell earnings rise to $9.1 billion
In the first quarter, Shell’s adjusted earnings rose to $9.1 billion from $3.2 billion in the same period last year. Net income rose to $7.3 billion from $5.8 billion in last year’s first quarter.
Shell said that it would also take a $3.9 billion charge to cover the cost of exiting investments in Russia, which the London-based energy giant pledged to do after the invasion of Ukraine.
BP records $6.2 billion profit
BP posted its highest quarterly profit in over a decade – with the British energy company announcing on Tuesday that its underlying replacement cost profit rose to $6.2 billion in the first three months of this year, more than doubling the $2.6 billion from the same period last year.
BP PLC also said its net loss in the first quarter totaled $23 billion, after accounting for a write-off of its nearly 20% stake in Russian oil producer Rosneft in response to the Ukraine war.
Both BP and Shell’s recent profit reports have contributed to calls in Britain for the government to impose a tax on energy companies’ windfall earnings, in hopes of helping consumers struggling with rising energy prices. Prime Minister Boris Johnson has rejected the idea , saying the tax would reduce investment in Britain during efforts to diversify the country’s energy industry.
The British government’s “refusal to tax the super-profits of energy companies is completely unforgivable when people are too terrified to heat their homes,” Ed Davey, leader of the Liberal Democrats, told the Associated Press.
Exxon doubles profits from last year to $5.48 billion
At the end of April, Exxon Mobil reported $5.48 billion in profits during the first quarter of 2022 – also more than doubling its profits compared with the same period last year. Revenue for the Irving, Texas-based company was $90.5 billion, far exceeding the revenue of $59.15 billion during the same quarter in 2021.
But, after abandoning Russian operations due to the war, Exxon also took a significant hit, writing down $3.4 billion.
Chevron reports $6.26 billion profit
Also at the end of April, Chevron reported a quarterly profit of $6.26 billion, over four times its earnings of $1.4 billion in the first quarter of last year. Revenue for the San Ramon, California-based energy producer surged 41%, to $54.37 billion.
Sinopec totals $3.45 billion net profit
According to Reuters, China Petroleum & Chemical Corp, or Sinopec, reported 22.61 billion yuan ($3.45 billion) net profit under Chinese accounting standards for the first quarter of 2022, compared to 17.93 billion yuan ($2.69 billion) last year.
Sinopec also saw a 25% surge in net income.
Phillips 66’s adjusted earnings of $595 million
For the first quarter of the year, Phillips 66 reported first-quarter earnings of $582 million, with adjusted earnings of $595 million.
In 2021, Phillips 66 reported a first-quarter loss of $654 million, with an adjusted loss of $509 million.