Big Oil Breakout: Exxon, Chevron Post Profits

By: James Flippin · October 31, 2022 · Reading Time: 3 minutes

Exxon Bobs For Apple

When Russia attacked Ukraine, the global gas supply looked to be in crisis. Russia is a major player in the natural gas trade, and investors were wondering which companies, if any, would step up to fill the gap. Well, after a record-breaking quarter in the sector, that answer is becoming clear.

Energy conglomerate Exxon Mobil (XOM) posted a whopping $19.66 billion third quarter profit. This greatly exceeded analyst expectations. To put it in perspective, Apple (AAPL) earned $20.7 billion during the same period.

Exxon’s earnings leave it within reach of the world’s largest company – and it’s not alone.

Chevron Scores Big

Chevron (CVX) is another US oil company that’s profiting from higher exports to overseas markets. Chevron’s gains weren’t as massive as Exxon’s, but it still posted a net profit of $11.2 billion during the third quarter – almost double what it posted last year.

Chevron attributed its massive success to increasing demand, tight supply due to pandemic cuts, market disruption from the war in Ukraine, and higher prices.

This last factor, however, is starting to draw criticism from both US and European consumers.

High Profits, High… Prices?

These increased profits stem from increased demand overseas, largely to fill the Russia-sized gap in supply.

But, at the same time, the average gallon of gas in the US costs $3.76, according to AAA. This is down from its all-time peak, but far above 2021’s already-high average of $3.01. This begs the question: with companies like Exxon on track to earn $80 billion in profit this year, why are gas prices still so high?

This issue has reached the highest levels, with President Joe Biden voicing his concerns. “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product,” he tweeted. “And do it now.”

Hopefully for consumers, this price surge is just a temporary event until the global supply of oil gets back into balance. Additionally, the midterm elections are in full swing, which historically gives politicians extra incentive to prioritize bringing down gas prices.

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