While Americans Stare Down a Recession, Oil Companies Are Making Record Profits

The top three Western oil companies made $46 billion last quarter.

An ExxonMobil gas station in Hell's Kitchen in New York in April.Richard B. Levine/ZUMA

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

The three largest Western oil companies—Chevron, Exxon, and Shell—made a record $46 billion in total profits last quarter, the Wall Street Journal reports. Exxon alone recorded an all-time high of $17.9 billion in profits during the second quarter, which was more than four times as much as it made during the same period last year.

The news comes after gas prices reached a record high of more than $5 per gallon in mid-June as a result of Russia’s invasion of Ukraine, although the national average has since declined to $4.25 per gallon. Oil companies are banking record profits because of high oil prices, not because they’re producing far more oil and gas. As the Journal explains: 

Exxon’s oil and gas production was up about 4% from the same period last year. Chevron’s oil-and-gas production declined globally about 7.4% compared with the same period a year ago, largely due to the end of projects in Thailand and Indonesia, though its production rose in the U.S. by about 3.2%.

President Joe Biden has accused oil companies of profiteering. As he wrote in a letter to oil executives last month, “At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable.”

The news about the most recent round of record profits has led to more backlash from Democrats. “Shell broke a record and made $11.5 billion in profits in the last quarter,” Sen. Jeff Merkley (D-Ore.) wrote on Twitter. “That’s why you’re paying more at the pump. The oil companies are ripping Americans off.”

But long-term solutions to high prices at the pump will require real innovation. As my colleague Tom Philpott wrote in March:

Pain relief for Americans reeling from pricey gasoline won’t come from bashing oil refiners or speciously accusing the Democrats of burdening Big Oil with regulation. Eventually, if and when the Ukraine war and the pandemic end, the oil industry will re-enter one of its periodic bust cycles, and gas prices will drop accordingly. In the long run, easing the hardship consumers feel from high gas prices will depend on developing real alternatives to the gas-guzzling car: making cities more dense, better serving them with mass transit, and hastening the transition to electric vehicles.

Some of that could come from the $369 billion in climate and energy spending that Sen. Joe Manchin agreed to this week as part of a deal with Majority Leader Chuck Schumer. Sen. Kyrsten Sinema is still reviewing the proposal.

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and billionaires wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

Fact:

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate