US energy giants ExxonMobil and Chevron are expected to announce record combined profits of almost $100 billion in 2022, The Financial Times has reported.
ExxonMobil is scheduled to register $56 billion in profits and an 80% annual increase in its share price (to $110), while Chevron will record $37 billion in net earnings and a share price increase of 53% (to $180).
The US companies' earnings are reflective of the broader profits bonanza enjoyed by Big Oil over the past year: in October, The Guardian estimated that the world's top seven oil companies recorded $173 billion in profits over the first nine months of 2022.
Money, money, money
Energy analysts attribute fossil fuel companies' record earnings to increased global energy demand following the world's emergence from the Covid-19 pandemic, as well as limited global supply precipitated by Western sanctions on Russia after the latter's invasion of Ukraine in February last year.
US fossil fuel companies, in particular, have benefited enormously as a result of Western sanctions: the US is now the world's leading exporter of liquified natural gas (LNG), with 71% of its LNG exports going to the EU and the UK.
In June, US President Joe Biden explicitly criticised ExxonMobil for making "more money than God", and called on the company to "start investing" and "paying [its] taxes".
In response to these record earnings, the EU announced in September that it would impose a 33% tax on this year's profits of fossil fuel companies. The bloc claimed that the levy will raise up to €25 billion, which could then be used to make green investments and subsidise European citizens' and businesses' exorbitant energy costs.
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However, because of various legal technicalities many companies may well avoid having to pay the tax.
Moreover, on Wednesday ExxonMobil announced that it was suing the EU over the imposition of the levy, claiming that the tax was both illegal and "counterproductive", insofar as it would "undermine investor confidence, discourage investment, and increase Europe's reliance on imported energy".
Both ExxonMobil and Chevron also recently unveiled plans to buy back tens of billions of dollars of their own shares and to increase shareholders' dividends. This, too, has deeply angered Western government officials, who believe that the companies should be investing in production at a time when soaring inflation and high energy prices are threatening to lay waste to Europe's industry.
