Iran war sends oil profits soaring
ExxonMobil, Shell and Chevron reported combined second quarter profits topping $36 billion, a haul that works out to over $400 million per day, while the war with Iran keeps prices at the pump at near-record highs.
Chevron's net income hit $12.2 billion, nearly five times what it took in a year ago. Exxon – a partner with SABIC in the Gulf Coast Growth Ventures petrochemical facility – posted $14.5 billion, more than double its year ago result. And Shell reported adjusted earnings of $9.84 billion, also more than double the same quarter last year.
Two Coastal Bend refiners have posted similarly outsized numbers. Valero reported $3.7 billion in net income for the quarter, more than five times the $714 million it earned in the same period last year – and about $28,000 per minute. CITGO has yet to release its second quarter results, but reported $157 million in first quarter profit, reversing an $82 million loss from a year earlier.
U.S. and international fossil fuel companies are raking in massive profits resulting from the disrupted tanker traffic through the Strait of Hormuz and knocked out Middle East refining capacity that has left buyers competing for a shrinking pool of gasoline and diesel. An April analysis by the environmental group Global Witness, published with The Guardian, found the world's top 100 oil and gas companies pulled in roughly $30 million an hour in excess profits during the early days of the war.
The corporate bonanza is driving calls in Washington to claw some of the money back. Sen. Sheldon Whitehouse of Rhode Island along with Rep. Ro Khanna of California have proposed a windfall profits tax on companies that produce or import more than 300,000 barrels of oil a day.
Under the proposal, the government would measure how far current prices have risen above a pre-war baseline, split the resulting excess profit with the companies, and return half of it to lower income households through tax rebates. Whitehouse's office says the bill would leave roughly 70 percent of U.S. oil production untouched.
Predictably the American Petroleum Institute has called the windfall tax proposal “fundamentally misguided,” warning that taxing profits would discourage investment. The United Kingdom and the European Union both adopted windfall taxes after Russia's invasion of Ukraine, together raising more than 40 billion dollars that governments used to offset high energy bills for households.
None of that relief exists for Coastal Bend residents. Our communities have long been told that hosting refineries and petrochemical plants is the price of a stable local economy and good paying jobs. But this quarter is a reminder of where the real money goes when prices spike – to executives and shareholders, not to local workers or to lower gas prices at Stripes. Corpus Christi drivers are now paying an average of $3.77, above the current statewide figure, even as the refineries along the ship channel pull in millions per day and pollute our air and water.