While the average American faces struggle when filling up at the pump, industry leaders such as Exxon Mobil and Chevron are reporting record profits. According to Bloomberg, in the three months through June, the American crude oil benchmark averaged about $109 a barrel, or 64% more than in the same period last year. This is occurring as gasoline prices in the United States reached a national record average of just over $5 a gallon on June 14, according to AAA.
The increase at the pump means profits for some of the largest energy companies. Exxon recently reported profits of more than three times what it earned a year ago. Its revenue soared from $67.7 billion a year ago to $115.6 billion. Chevron also recorded profits from the soaring gas prices. It reported profit more than tripling to $11.6 billion as sales rose to $65 billion, compared with $36 billion a year ago.
These earnings beat analysts’ estimates on both the top and bottom line. Energy stocks are by far the top-performing group this year, advancing 35%, with the second-best sector, utilities, having gained only just 2.4%.
The windfall of these energy giants came about after crude oil, natural gas, and gasoline prices increased exponentially. These increases resulted from Russia’s invasion of Ukraine and efforts to punish Moscow by cutting off its petroleum sales to the rest of the world. The companies’ record profits will draw President Joe Biden’s ire, as he has been very vocal regarding refinery profit margins at a time of war. President Biden asserted that Exxon and other oil majors were capitalizing on a global supply shortage to fatten profits. In President Biden’s own words, Exxon is making “more money than God” after posting its biggest quarterly profits in seven years.
Still, Exxon warned that, even with the record profits as the markets convulse, global energy supplies will remain tight and expensive for the foreseeable future.