FT: U.S. oil companies have earned $200 billion thanks to rising energy prices

By counting S&P Global Commodity Insights for the Financial Times, U.S. publicly traded upstream and downstream oil companies posted $200.2 billion in combined profits in the second and third quarters. military conflict in Ukraine. “By the end of the year, operating free cash flows will be at or very close to record highs,” said Gasan Eltori, head of S&P’s upstream analysis division.

The excess profits of oil companies have already led to the fact that in a number of countries the authorities want to impose additional taxes on them. At the beginning of September it became knownthat the European Commission is discussing the possibility of introducing an additional tax on excess profits of energy companies. The EU authorities want to use the proceeds from these taxes to compensate for the increase in energy costs this year.

Some experts point out that the Western oil companies themselves do not intend to simply keep all the excess profits for themselves, but to use it for capital investments or increased dividends for shareholders. According to Raymond James investment company, this year the world’s 50 largest oil companies will allocate up to $300 billion for capital investments. At the end of October, the management of British Shell, which doubled its net profit in the third quarter to $9.5 billion reported, which intends to raise dividends per share by approximately 15% in the fourth quarter of this year, payable in March 2023. In addition, a new $4 billion share buyback program has been announced and is due to be completed by the end of the next reporting period.

Evgeniy Khvostik