US companies see record-breaking profits boosted by high oil prices

Oil companies in the US reported unprecedented profits in the last quarter, boosted by the energy crisis triggered by the war in Ukraine. Revenues for ExxonMobil and Chevron for the second quarter of this year totalled USD 17.85 bn and USD 11.62 bn, respectively, the Associated Press (AP) agency reported.

During the same quarter a year earlier, ExxonMobil earned USD 4.69 bn and Chevron USD 3.08 bn.

UK-based Shell, which reported results for the latest quarter a day earlier, also saw a record profit of USD 11.5 bn, more than double that of a year before (USD 5.5 bn).

Oil companies’ earnings are being driven by both the very high oil prices and the significantly increased demand for LNG, which is linked to sanctions imposed on Russia following the invasion of Ukraine, AP explained.

ExxonMobil ramped up production when the price of oil exceeded USD 100 per barrel, and increased investment in LNG production.

In the US, the fact that the number of refineries operating in the country has decreased over the two years of the COVID-19 pandemic is also accounting for the very high fuel prices, the agency pointed out.

On Tuesday, the White House announced that it would sell another 20 million barrels of oil from the strategic reserve. This means that together with the previously announced 180 million barrels, the US will release 200 million barrels of oil to the market.

This is the fifth sale of oil from the reserve needed to counteract the high crude prices in the wake of Russian aggression, and this process is to continue for the “next few months”.