2022 was a good year for the big oil firms; ExxonMobil, Chevron, Shell, Total Energies, and BP, which reaped significant profits, making it their most profitable year. According to TradingPlatforms.com, the big five oil companies earned a combined profit of $200 billion in 2022.
The site’s Financial analyst Edith Reads comments, “Despite the global economic crisis in 2022, oil companies managed to pull through unscathed, earning more profits. Big oil companies are on a road to gain more profits as renewables are yet to secure standing in the global market.”
How Much Did the Big Five Oil Companies Make in 2022?
ExxonMobil, the Texas-based company, earned $59.1 billion in profits, a significant rise from $ 23.04 billion in 2021. However, the oil company has faced criticism due to the rise in profits, with the White House calling it outrageous.
Shell, a global energy giant, secured $39.9 billion in profit, coming in second after ExxonMobil.
Chevron garnered $36.5B in profits from $15.6B in 2021, while Total Energies garnered $36.2 billion from $18.2billion, and BP secured $27.7 billion from $12.8B.
Why Did the Big Five Oil Companies Secure Massive Profits?
The onset of the covid pandemic caused the oil companies’ sales to plummet. However, with the restrictions lifted, the oil demands increased, leading to a surge in global oil prices. As a result, oil companies earned much revenue, leading to a significant profit rise. The Russian invasion of Ukraine also led to the depletion of energy supplies worldwide. Hence the world saw oil prices skyrocket and giant oil firms reaping gains.
The oil demand in developing countries increased significantly. With the growing population and economic development, the developing countries imported more oil, providing significant revenue for the oil firms.
Challenges Facing Big Oil Companies
With the rise in profits, world leaders imposed windfall taxes on big oil firms. ExxonMobil recently filed a lawsuit against these windfall levies imposed by the EU, saying it incurred $1.3 billion.
The talk on climate change threatens the oil industries as significant countries are planning to cut down on oil use in support of reducing global warming effects.
The significant gains of oil companies in 2022 are impressive; however, oil companies will have to think of strategies to remain competitive as renewables are attracting the attention of many countries. Nevertheless, big oil companies will reap profits as industries develop long before other energy sources take over.