Energy giants Chevron Corp. and Exxon Mobil Corp. on Friday posted huge profits bolstered by sky-high gas prices and told investors that they plan to keep oil production mostly flat.
Chevron raked in $6.3 billion in the first quarter, quadrupling its profit from the same period last year, while Exxon brought in $5.5 billion, more than double last year’s first-quarter haul.
The oil and gas companies are among the biggest beneficiaries of soaring gas prices, which rose 44 percent in the U.S. over the last 12 months, according to AAA. Crude oil remains above $100 per barrel amid supply constraints stemming from the pandemic and Russia’s invasion of Ukraine.
Despite calls from the Biden administration to increase oil production to bring consumer prices down, Chevron and Exxon executives on Friday said that they would keep production relatively flat. Exxon instead announced plans to triple its stock repurchases to $30 billion through 2023, while Chevron said it would repurchase a record $10 billion of stock by the end of the year.
“I want to acknowledge the very real impact the high prices are having on families all around the world,” Exxon CEO Darren Woods said on an earnings call. “You may recall that we anticipated this in 2020 with industry investment levels well below those required to offset depletion.”
Major shareholders have urged oil and gas giants not to invest too much in new production, arguing that those capital expenditures could turn into bad investments when oil prices inevitably drop.
Still, the huge first-quarter profits and buyback programs announced Friday, which come as high gas prices hammer low- and middle-income Americans, are certain to draw scorn from liberal groups and Democratic lawmakers who have accused the industry of price gouging.
“There’s no secret as to why their profits are soaring: Big Oil has fixed costs of production while the market price of oil is skyrocketing, thanks to Russia’s invasion of Ukraine and other reasons. This is a classic situation of windfall profits,” Robert Weissman, president of Public Citizen, said in a statement on the earnings reports calling for a windfall tax on oil giants.
House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles Schumer (D-N.Y.) on Thursday unveiled legislation to empower regulators to hit oil and gas companies with penalties for keeping consumer prices high while returning the resulting profits to shareholders.
“They are hoarding the windfall while keeping prices high for people at the pump,” Pelosi said during a press briefing in the Capitol. “In this time of war — in any time — there is no excuse for big oil companies to profiteer, to price-gouge or exploit families.”