Exxon Mobil Corp.’s second-quarter refining earnings surged by as much as $5.5 billion, signaling a season of windfall profits for the fuel-making sector as consumers bear the burden of near-record gasoline prices.
Widening refining margins added as much as $4.6 billion during the quarter while the value of unsettled derivatives provided up to $900 million more, the Irving, Texas-based company said in a regulatory filing on Friday. Meanwhile, surging oil and natural gas prices boosted results by as much as $3.3 billion.
Sky-high pump prices are intensifying broader inflationary trends and increasing pressure on political leaders to shield consumers through giveaways such as suspending fuel taxes. US President Joe Biden singled out Exxon’s profits for criticism last month, accusing the company of making “more money than God” at a time when consumers were suffering.
Exxon’s bumper profits “are largely a result of underinvestment by many in the energy industry over the last several years,” spokesman Casey Norton said by email. The company invested in new supplies during the pandemic despite incurring a $22 billion loss in 2020, he noted.
Exxon has the largest refining footprint of the major oil companies at a time of soaring margins around the world due to high demand for gasoline and diesel and a shortage of facilities to make them. The world lost about 3 million barrels of daily refining capacity when the Covid-19 pandemic slashed consumption and fuel supplies have been further strained by Chinese export controls and sanctions on Russia.
High product prices and refining margins are “set to stay high for some time,” and at least through the first half of next year, Alastair Syme, an analyst at Citigroup Inc. write in a note.
Exxon invested almost $120 billion in capital projects between 2017 and 2021, more than double what it earned, Norton said. “We did this to meet society’s energy demands and, in fact, are investing more than any other US company to grow oil and natural gas production.”