Major American oil company ExxonMobil made record profits last year on the back of Russia’s invasion of Ukraine. According to corporate results published by the company, ExxonMobil made $55.7 in annual profits last year, riding high on increased gas and oil prices and Europe’s abandonment of Russian hydrocarbon exports.
This new record exceeds the previous record in the financial crisis of 2008 when the price of a barrel of crude reached $150, netting the company $45.22 billion. The company’s 2022 results were 45% up compared to 2021 and far above market forecasts.
“While our results clearly benefited from a favourable market, the counter-cyclical investment we made before and during the pandemic provided the energy and products people needed as economies began recovering and supplies became tight,” said CEO Darren Wood. “We leaned in when others leaned out.”
No time to slow down
After historic losses posted in 2020 – a year marked by economic slowdown due to the Covid-19 pandemic and travel restrictions – Exxon returned to the green in 2021. Nevertheless, it is clearly the war in Ukraine which has the wind in the sails of energy companies.
To keep up with demand, the company massively expanded its Beaumont Refinery in Texas. The company now hopes to be able to process 250,000 barrels of crude oil per day at the start of this year. ExxonMobil is also now exploiting hydrocarbon reserves in Guyana and the Permian in a bid to keep up with rallying global demand.
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In the US, the price per gallon of unleaded fuel reached a historic high of more than $5 last June, according to data from the American Automobile Association (AAA). Likewise in Europe, refined fuels reached high prices, which swelled the profits of American exporters.
Despite the record results, the results may have been even higher, if not for the European Union’s tax on excess profits made by international energy companies. The company says that its fourth quarter results were significantly impacted by a $1.3 billion tax to the EU.
Unjust gains?
ExxonMobil's competitor Chevron also posted its biggest windfall ever, with $36.5 billion in profits for 2022. The record profits have irritated White House officials, who want to introduce a similar tax on excess profits as in the EU.
In a statement published by officials, the White House said that it was "outrageous that Exxon has posted a new record for Western oil company profits after the American people were forced to pay such high prices at the pump amidst Putin's invasion."
"The latest earning reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits to increase production, but they're instead choosing to plough those profits into padding the pockets of executives and shareholders," added White House spokesperson Abdullah Hasan.
Republican opposition has blocked any solidarity taxes, claiming that such a tax would discourage investment in the sector.
