Russia’s war helped boost Big Oil’s profits - but don’t expect drilling rise to...
Gene J. Puskar, STF / Associated PressThe world’s largest oil companies are churning out massive profits in the first few months of the year even as they face uncertainties created by Russia’s war with Ukraine, a pandemic that continues to slow parts of the world, and calls to simultaneously increase production and focus on climate change efforts.
“As we think about recent events, our job has never been clearer or more important,” Exxon Mobil CEO Darren Woods told investors on Friday. “The need to meet society's evolving needs reliably and affordably is what consumers and businesses across the globe are demanding, and what we delivered this quarter.”
The oil and gas industry was already maneuvering through an uneven pandemic recovery affecting demand. The price of oil was going up as economies rebounded, then Russia’s invasion of Ukraine threw more chaos into the mix, pushing prices — and profits — higher. Many hoped high oil prices would help producers in places like the Permian Basin rapidly increase output to help make-up for that lost Russian oil. Instead, supply chain issues largely caused by the war - paired with investor demands for disciplined spending - have hindered efforts to quickly up production.
That’s in line with what oil field services companies like Houston-based Halliburton have been reporting. In an earnings call last week Halliburton’s CEO Jeff Miller said the equipment market was nearly “sold-out” partially due to supply chain issues. “Chevron is doing its part to grow domestic supply with U.S. oil and gas production up 10 percent over first quarter last year,” CEO Mike Wirth said in a statement. “Consistent with our plans, we’re investing to grow both traditional and new energy business lines.”
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