While sky-high gas prices were draining the public’s wallets at the pump, a new report reveals that Big Oil corporations across the board were bragging about their profits in meetings and making plans to enrich executives and shareholders with their record revenues.
The Groundwork Collaborative analyzed shareholder and analyst calls within major oil companies like Exxon, Shell and Chevron and discovered that executives have effectively been celebrating high gas prices. In calls from the second quarter of this year, which just ended, the companies emphasized that their primary goals were to maximize profits and returns to shareholders and admitted that inflation and economic uncertainty are an opportunity for them.
Over the past months, gas prices have soared – and oil companies are posting record profits as a result. The fossil fuel industry and conservatives have pointed to factors like Russia’s invasion of Ukraine and the COVID economy as being the primary reasons for high prices, but, as climate advocates have said, the industry is playing a huge role in keeping prices inflated.
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In an earnings call in late July, for instance, Shell CEO Ben van Beurden said that while there is some instability and reduced production as a result of the Russian invasion, what little of it that is happening is good for business.
“We do have a bullish outlook on oil and gas prices generally and … in areas of greater stress like in Europe,” van Beurden said on a July 28 call on Shell’s Q2 earnings. “And that is why we are also quite confident to say that, hey, if the conditions that we are witnessing today are persisting, then we expect to be paying out more than 30 percent of our cash flow” to shareholders and buybacks.
Meanwhile, Chevron executives noted in a July 29 call that while the company’s production decreased by 7 percent from last year, the Q2 earnings increased by a towering $8 billion over the same period last year.
The earnings calls are further evidence that the fossil fuel industry is using high inflation and instability to profiteer. Climate advocates and lawmakers have called for a windfall tax on the oil and gas industry to discourage them from inflating gas prices.
The Groundwork Collaborative condemned the companies for taking advantage of consumers, who are already struggling with high inflation in other sectors.
“The data is in. As Americans hit their breaking point with high prices at the pump, Big Oil CEOs are using the crisis in Ukraine to bring in eye-popping profits,” Lindsay Owens, Groundwork Collaborative executive director, said in a statement. “Exxon brought in $2,245 a second in the second quarter – that’s not a strong quarter, it’s a one-way racket.”
Oil and gas corporations have been posting record earnings this year. Across six of the largest oil corporations, the Natural Resources Defense Council (NRDC) has found that Q2 earnings have jumped nearly 250 percent this year over 2021’s Q2 earnings.
In some cases, revenues for these companies have reached all-time highs. Exxon and Chevron have both reported making record-breaking profits and revenues over the past three months; Exxon’s income between April and June was $17.9 billion, or more than triple its income over the same period last year. Chevron similarly experienced a highly profitable quarter, with profits more than tripling over 2021’s Q2, reaching $11.6 billion.
As gas prices reached an average of over $5 a gallon in June, these corporations turned around and spent their record-breaking earnings on stock buybacks. The NRDC found that the same six companies that have multiplied their earnings have spent a hair-raising $18 billion on stock buybacks.
As the companies told their shareholders, they’re planning on keeping these buybacks going. Exxon said in a July earnings call that it is planning on spending $30 billion on stock buybacks over this year and the next – while predicting that gas prices will stay high for years. Chevron and Shell also said that higher earnings are allowing them to increase stock buybacks this year.