Exxon Mobil Corp. showed its highest profit since 2008 as Russia’s war in Ukraine shook up global commodity markets, according to Bloomberg.
Exxon’s announcement that first-quarter results may have reached almost US$11 billion highlights robust profits across the oil industry as trade sanctions, shipping disruptions and surging demand strain supply lines.
The windfall doesn’t come without risks, however, Bloomberg reported. Key Democrats in the U.S. House of Representatives demanded Exxon and fellow oil companies Chevron Corp., Shell Plc and BP Plc immediately halt dividends and share buybacks until the war’s end, and rebuked them for “profiteering off the crisis in Ukraine.”
Bloomberg said that political leaders are under pressure to alleviate sky-high energy prices and the spectre of shortages. U.S. President Joe Biden recently pleaded with the industry to reinvest profits in new wells to help plug the supply gap from shunned Russian crude. At the same time, he warned of punishing financial penalties for companies “slow-walking” projects involving federally owned oil prospects.
The lawmakers flayed Exxon and the other three oil explorers for collectively spending US$44 billion on buybacks and payouts last year and planning to shell out another US$32 billion in 2022, according to a letter which was signed by House Oversight Committee Chair Carolyn B. Maloney and Environment Subcommittee Chair Ro Khanna.
Exxon “is charging outrageous gas prices while seeing record profits,” Senator Ed Markey, a Massachusetts Democrat, said in a Facebook post. “We should tax Big Oil’s windfall profits and return that money to the working people of this country.”
Exxon said that first-quarter results may have been as much as US$2 billion higher than earnings during the final three months of 2021, when the company raked in US$8.8 billion, according to a filing.
Surging oil prices were the main driver, with natural gas and larger refining margins also contributing, Bloomberg said. International crude futures touched a 14-year high of almost US$140 a barrel during the quarter.
Separately, Bloomberg noted that Exxon formally approved the US$10 billion Yellowtail development off the coast of Guyana after receiving government and regulatory approvals. The project is the fourth and largest in an area known as the Stabroek Block, and is expected to pump about 250,000 barrels a day starting in 2025.
Exxon also disclosed that exiting the Sakhalin-1 oil development in Russia’s Far East may cause a writedown of as much as US$4 billion. The company recently pledged to leave Russia due to international sanctions and what the company’s Chief Executive Officer Darren Woods described as the nation’s “needless destruction” in Ukraine.
