Record oil company profits in 2022 amid war in Ukraine and rising energy prices


  • After Russia invaded Ukraine in February, the price of oil spiked in the first quarter of 2022.
  • Shell’s adjusted profit, for example, reached $9.1 billion, while Exxon Mobil reported profits of $5.48 billion.
  • Rising prices have pushed up profits for major energy companies, further contributing to global inflation and the cost of living crisis.

As households around the world grapple with rising energy bills, some of the world’s major oil giants posted record profits for the first three months of this year.

Profits for Exxon Mobil, Shell and others also rose by billions despite significant exit costs from operations and/or investments in Russia amid the war in Ukraine.

After Russia’s invasion of Ukraine in February, the price of oil soared in the first quarter of 2022, as countries that rely heavily on Russia for energy raced to find alternative fuel sources in a climate of uncertainty.

The benchmark for global oil prices, Brent crude, averaged $102.23 a barrel in the first quarter, 67% higher than the same time last year, according to the Associated Press. In the United States, for example, motorists have consequently found increasingly expensive gasoline prices at the pump.

►Live Updates: Ukrainian leader denounces strike against museum; US sends more military aid

Home heating bills and electricity prices have also ballooned around the world, with natural gas prices rising from $3.50 per million British thermal units to around $5.60.

High oil and gas prices have inflated the profits of major energy companies, further contributing to global inflation and the cost of living crisis.

The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, was 12.3% in the first quarter based on estimates and earnings reports so far. , according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of around 11%.

“Profit margins are expected to decline,” Lindsay Owens, executive director of Groundwork Collaborative, a progressive economic policy research group, told USA TODAY.

Instead, she noted, “they’re growing.”

Here is a breakdown of the profits and profits earned by some of the world’s oil giants in the first three months of 2022:

►Excessive price: Critics say corporate greed is making inflation worse, citing record profits despite rising costs

Shell profits rise to $9.1 billion

In the first quarter, Shell’s adjusted profit rose to $9.1 billion from $3.2 billion in the same period last year. Net profit reached $7.3 billion, compared to $5.8 billion in the first quarter of last year.

Shell said it would also need a $3.9bn charge to cover the cost of exiting investments in Russia, which the London-based energy giant pledged to do after the invasion from Ukraine.

►Shell revenues: Shell reports record $9.1 billion profit as oil prices soar in first quarter

BP posts a profit of $6.2 billion

BP posted its highest quarterly profit in more than a decade – the British energy company announcing on Tuesday that its underlying replacement cost profit had risen to $6.2 billion in the first three months of this year , more than double the $2.6 billion in the same period last year .

BP PLC also said its first-quarter net loss was $23 billion, after accounting for the write-off of its nearly 20% stake in Russian oil producer Rosneft in response to the war in Ukraine.

Recent earnings reports from BP and Shell have helped spur the UK government to impose a windfall tax on energy companies, hoping to help consumers struggling with rising energy prices . Prime Minister Boris Johnson rejected the idea, saying the tax would reduce investment in Britain during efforts to diversify the country’s energy industry.

The UK government‘s “refusal to tax the super-profits of energy companies is completely unforgivable when people are too terrified to heat their homes,” Ed Davey, leader of the Liberal Democrats, told The Associated Press.

Exxon doubles profit from last year to $5.48 billion

In late April, Exxon Mobil reported $5.48 billion in profit in the first quarter of 2022, also more than double its profit from the same period last year. Revenue for the Irving, Texas-based company was $90.5 billion, far exceeding revenue of $59.15 billion in the same quarter in 2021.

But, after abandoning Russian operations due to the war, Exxon also took a hit, recording $3.4 billion.

Exxon Earnings: As gas prices soar, Exxon Mobil doubled its profits from a year ago to $5.48 billion

Chevron reports $6.26 billion profit

Also in late April, Chevron reported quarterly profit of $6.26 billion, more than four times its $1.4 billion profit in the first quarter of last year. Revenue at the San Ramon, Calif.-based energy producer jumped 41% to $54.37 billion.

Sinopec nets profit of $3.45 billion

According to Reuters, China Petroleum & Chemical Corp, or Sinopec, reported net profit of 22.61 billion yuan ($3.45 billion) by Chinese accounting standards for the first quarter of 2022, down from 17.93 billion yuan. ($2.69 billion) last year.

Sinopec also recorded a 25% increase in net profit.

Phillips 66 adjusted earnings of $595 million

For the first quarter of the year, Phillips 66 reported first-quarter earnings of $582 million, with adjusted earnings of $595 million.

In 2021, Phillips 66 posted a loss of $654 million in the first quarter, with an adjusted loss of $509 million.

Contributor: Associated Press, Paul Davidson, USA TODAY.


Comments are closed.