Oil companies brought in staggering profits once again as people worldwide struggled with high gasoline and energy prices.
Exxon Mobil broke records with its profits in the third quarter, raking in $19.66 billion in net income. The Irving, Texas company said Friday that it booked $112.07 billion in quarterly revenue, more than double the revenue it received last year during the same period.
Chevron had $11.23 billion in profits, almost reaching the record profits it attained last quarter, and the San Ramon, California, company brought in $66.64 billion in revenues.
The high cost of energy has hit consumers in multiple ways. Americans, especially low-income workers, have struggled with painfully high gasoline prices in recent months, paying more than $4.80 on average for a gallon of regular at the beginning of July, according to AAA. High energy prices also hit manufacturers and retailers, who pass on those costs to customers in the form of high prices for food, clothing and other goods.
Gasoline eased somewhat towards the end of the quarter, but customers were still paying more than $3.79 a gallon of regular, on average, in late September.
Exxon boosted production of gasoline and oil during the quarter to meet growing demand. It had its best-ever refinery output in North America and its highest globally since 2008, the company said. And it produced 3.7 million barrels of oil or oil-equivalent per day, and had record production in the Permian Basin, the most productive oil field in the U.S.
The investments Exxon made, even during the pandemic, enabled the company to increase production to meet the needs of customers, said CEO Darren Woods in a conference call with investors.
“Where others pulled back in the face of uncertainty and a historic slowdown, retreating and retrenching, this company move forward, continuing to invest and build to help meet the demand we see today and position the company for long term success in each of our businesses,” Woods said.
Natural gas prices have also been high, especially as demand for liquefied natural gas has remained strong globally. The U.S. has been increasingly exporting liquefied natural gas to Asia and Europe, especially as supply of Russian natural gas declined after Russia invaded Ukraine and prices skyrocketed. Woods listed inventory concerns as one of the reasons American natural gas prices rose by 15% during the quarter.
Oil prices were initially high during the quarter but fell gradually. A barrel of benchmark U.S. crude was selling for more than $100 when the quarter began in July but was selling for closer to $80 at the end of September. Even so, diesel prices remain high, according to AAA, which affects delivery costs and raises prices for all sorts of consumer goods.
To help meet growing demand, Exxon is expanding its oil refinery in Beaumont, Texas and expects the additional refined product to become available in early 2023.
Exxon’s refining businesses was the star performer during the quarter, said Peter McNally, global sector lead at Third Bridge, in a note to investors. “While some of the political rhetoric cooled during the quarter, investment in the company’s fuel manufacturing segment heated up along with the profits,” McNally said.
American oil companies aren’t the only ones benefiting from high energy prices. European energy giants Shell and TotalEnergies reported huge profits Thursday. That fueled calls to tax the profits of energy producers which have benefited from high oil and natural gas prices following Russia’s invasion of Ukraine, even as Europe heads into winter during an energy crisis.
Shares of Exxon Mobil added about 2% in midday trading, while Chevron added less than 1%.