Oil Giant’s Huge Profits Revive Calls for Unexpected Taxes

International energy giants including Exxon Mobil and Chevron posted another round of enormous profits, profiting from surging energy costs that have boosted inflation around the world and led to fresh calls to further tax the sector.

Oil companies booked billions of dollars in benefits in the third quarter as prices for crude, natural gas and fuels like gasoline hovered near record levels, lifted by tight worldwide business sectors and disruption following Russia’s invasion of Ukraine.

The sheer size of the profits has restored calls from politicians and consumer groups to impose more taxes on the companies to raise funds to offset the hit to households, businesses, and the wider economy from higher energy costs. U.S. President Joe Biden, who earlier this year said Exxon was making “more money than God”, told oil companies this month that they were not doing enough to bring down energy costs.

Hours after Shell revealed a quarterly profit of $9.45 billion and raised its dividend by 15% on Thursday, Biden said the company was misusing its benefits. On Friday, he noted on Twitter in response to a remark from Exxon’s CEO that “giving profits to shareholders is not the same as bringing prices down for American families”.

In any case, Shell CEO Ben Van Beurden has said the energy industry ought to be prepared and accept that it will confront higher taxes to help struggling parts of society. Shell is well on target to surpass its record annual profit of $31 billion set in 2008.

In the UK, the president of the COP26 climate summit Alok Sharma said on Friday that Prime Minister Rishi Sunak’s government should explore extending a windfall tax on oil and gas firms. “These are excessive profits, and they have to be treated in the appropriate way when it comes to taxation,” Sharma said.

U.S. officials have likewise criticized the big oil companies for not accomplishing more to raise production more swiftly to offset rising costs to heat homes and fill the gas tank. Exxon Mobil, the biggest U.S. major, revealed nearly $20 billion in a net gain in the quarter ending in September, surpassing expectations and surpassing its previous record set just three months earlier.

Exxon, which drove record gains by the five producers known as the oil majors in the second quarter, far surpassed peers Shell and TotalEnergies with third-quarter profit almost twice as big. Its profits were aided by its highly criticized decision to double down on fossil fuels as European competitors shifted to renewable investments.

“Where others pulled back in the face of uncertainty and a historic slowdown, retreating and retrenching, this company moved forward, continuing to invest,” Exxon CEO Darren Woods said.

Chevron’s worldwide production of 3.1 million barrels of oil comparable per day (boed) for all of 2022 so far is down by about 100,000 boed from the same time a year ago. European governments have scrambled to fill gas storage after Russia cut off most of its natural gas exports to the continent, its essential client.

In Europe this week, France’s TotalEnergies detailed a record benefit of $10 billion, Norway’s Equinor likewise broke new ground helped by the all-time high in European gas costs, and Italy’s Eni almost significantly increased its profit from a year ago, beating the consensus with a profit of 3.73 billion euros ($3.72 billion).

“The Russian war in Ukraine has changed the energy markets, reduced energy availability, and increased prices,” Equinor Chief Executive Anders Opedal said in a statement.