A new study calculated that the oil and gas industry has made more than $2.8bn (£2.4bn) a day in profits over the past half-century. In the second quarter of 2022, Exxon posted a profit of $17.9bn, the highest any publicly listed oil company has ever reported. Chevron hauled in $11.6bn, while Shell reported $11.47bn and BP $9.3 bn, its biggest windfall in more than 14 years.
National oil companies such as Saudi Aramco saw year-on-year profits rise 90% during the second quarter. The Saudi kingdom raked in a cool $88bn during the first half of 2022. Norwegian’s Equinor paid $3bn in dividends last month, while France’s Total tripled its income. Glencore, the world’s largest coal shipper, made record profits and will pay shareholders an additional $4.5bn.
While shareholders and executives reap the benefits of this crisis, families struggle with exorbitant fuel and energy bills on top of climbing food prices. The UN reports that 50 million people in 45 countries are facing famine.
The UN secretary general, António Guterres, condemned the fossil fuel super-profits as “grotesque greed” and reiterating that it was immoral for corporations to be making record profits at a massive cost to the poorest communities and the climate.
This “energy crisis” has less to do with economic forces and more with greed. Petrol prices are lowest in Venezuela ($0.022 a litre), while a few miles away, Trinidad and Tobago pays $0.994. In Saudi Arabia, it’s $0.62, Russia $0.837, the US $1.083, China $1.285, the UK $2.003 and Norway $2.218. The price at the pump is made up of the costs of crude oil, refining, shipping and distribution, marketing, wholesale and retail margins, and, of course, taxes. The main driver is the crude price, which fluctuates at 50% to 60% of the total. Hence, an increase in crude raises petrol prices.
Another driver is inflation. Quantitative easing, or “printing money”, through the pandemic equated to £895bn pumped into the UK economy alone. This has contributed to Britain’s inflation rate, which is 10.1% and heading towards 15% – not vice versa, as some may have us believe. Stagflation is now a real possibility worldwide. All of this against the backdrop of many countries’ astonishing debts.
As the world locked down in early 2020, demand for crude plummeted. Production was reduced, hoping for a resurgence in price, and then, as 2021 ended, demand increased. Russia invaded Ukraine and crude prices rocketed. The Opec+ met on 30 June and agreed to add 648,000 barrels a day to oil markets in July and August, while President Joe Biden hastened to court Saudi’s crown prince, Mohammed bin Salman, a man he had harshly criticised for his human rights abuses. Both Biden and Boris Johnson – failed, however, to get an increase in the oil supply that would bring down the oil price from either Saudi or UAE. Opec+ kindly agreed to increase output by a mere 100,000 barrels a day for the month of September but in the last few days have agreed to slash that back again by the same amount for October.
So the world is again at the mercy of big corporations. Having been pillaged by big pharma during Covid, we now have to grit our teeth and bear the onslaught of big oil, the “new seven sisters” – Saudi Aramco, Gazprom, China’s CNPC, the National Iranian Oil Company, Venezuela’s PDVSA, Brazil’s Petrobras and Malaysia’s Petronas – as well as Exxon, Chevron, Shell, BP, Total and others.
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