For those of you who keep blaming Biden for high gas prices, this part of the reporting tells the truth about who is responsible.
“Despite calls from the Biden administration to increase oil production to bring consumer prices down, Chevron and Exxon executives on Friday said that they would keep production relatively flat. Exxon instead announced plans to triple its stock repurchases to $30 billion through 2023, while Chevron said it would repurchase a record $10 billion of stock by the end of the year. “
New leases aren’t being blocked. Production at existing wells is being held down by the companies.
“Chevron raked in $6.3 billion in the first quarter, quadrupling its profit from the same period last year, while Exxon brought in $5.5 billion, more than double last year’s first-quarter haul. “
400% profit increase for Chevron and more than double for Exxon? I’m sorry, but these companies are gouging the American public. And the Right blames Biden? Here is the proof of where the blame lies.
27 thoughts on “Americans Held Hostage by Big Oil”
I didn’t see you getting upset when the oil companies had massive losses last year.
Oil has always been boom and bust. They need to booms to retire debt so they can last through the busts.
RE: “Oil has always been boom and bust.”
I’d go a step further: All commodities are always boom and bust. Because of this natural volatility it is very important for government policies to be stable, predictable and rational over time. Only in that way can commodity-based industries plan well to meet unpredictable future needs.
Unfortunately, Stumble Joe is presiding over an incoherent collection of policies. For example, the president wants more oil production, but at the same time he wants to eliminate fossil fuels. Oil companies can’t plan for both policies at the same time. The best thing for them to do is just stop changing their operations until they can predict the future more reliably.
Higher gasoline prices at the pump are just one of the costs of having an Alzheimer’s patient as the leader of the free world.
The oil industry faces two killers.
First, the Saudis can produce a lot of oil at a profit if the price is as low as $20 a barrel. Fracking cannot produce at that level, so the Saudis can put them out of business at a whim any time they choose. Only the Saudi’s greed makes our domestic industry possible.
Second, the official policy of our government is to put them out of business sometime in the near future.
So, how do you invest for the future in that environment? Want to invest $500million in drilling ship that won’t be ready for 3 years when the government has declared an end to offshore drilling?
No future investment required to increase production at existing wells.
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No, only miracles.
A well is most profitable in its first months, when it produces in quantity under its own pressure. As the well ages, it needs to be pumped, and even then, production is at a much lower quantity, or abandoned. Even later, when it won’t pump enough to remain usable, it can be fracked to revive it.
But each stage requires new investment and has higher production costs per barrel.
There is no way to simply increase production of existing wells without higher costs.
They did not suffer “massive losses”; they suffered from LOWER profits, as the article states. And what kind of debt do they have at this point? THey are not retiring debt so much as buying back their own stocks.
And you missed the point about blaming Biden. The oil companies could still make obscene profits and increase production and bring consumer prices down.
What’s going to happen when their stockholders can no longer afford the gas and have to sell their stocks to survive? Oh, wait. THe company just buys it back at a lower price and then cut production to increase profits again and see the stock price rise.
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Exxon and BP may have stayed out of the red in 2020, though I doubt even that, but the shale producers who make up the margin lost billions. The major companies can remain profitable by not drilling offshore, but that limits supply.
The same foreign pressures on the oil industry today were active (less the climate foolishness) when I worked in the oilfield almost 60 years ago.
The price of oil is largely set by the Saudis because they can produce so much at such a low cost. That can only be overcome by all out production in the US, which requires a lot of investment.
Where do you get investment when the President states his intention to bankrupt the industry in less time than it takes to build a drilling ship and deploy it?
Once again you ignore the fact that there are oils in place that could produce more, if the companies chose to. The article made it clear that the oil companies were choosing not to increase production.
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No, the article expressed that opinion.
Businesses must act rationally, not altruistically, as they are using other people’s money in a fiduciary relationship.
Putting investors’ money at risk when the government has a policy of destroying the business breaks that bond.
But the government’s policy is to produce more fucking oil. The companies are choosing not to and buying back their own stock. I don’t see that as action rationally as a fiduciary.
The government’s policy is to produce more oil until the election, then to bankrupt those who produced it.
If the big oil companies decided to boost production no matter the cost, you would see the results in about 18 months.
That’s how much harm has been done in the last 18
…” the article expressed that opinion.”
You want to go back and read it again? This is taken DIRECTLY from the article. Not an opinion expressed by the piece, but the executives own statements.
…”Chevron and Exxon executives on Friday said that they would keep production relatively flat.”
Yes, but why matters.
Biden would like the oil companies to do the impossible, to ramp up production fast enough to save the Democrats butts in the midterms, but still put them out of business as soon as he no longer needs their help.
That fast a ramp up would require depleting reserves that cannot be replaced in the longer term without a huge investment.
…”but why matters”
Not in the context of my main point. QUIT BLAMING BIDEN FOR HIGHER GAS PRICES. The oil companies are solely responsible at this time.
Biden is the one who said the US would bankrupt domestic producers in his first term. That changes investment behavior.
You can’t upend a market and then expect it to protect you from the entirely predictable consequences.
“I didn’t see you getting upset when the oil companies had massive losses last year.”
Made up facts are so convenient!
“Last year” was 2021, right? The top 25 oil industry companies had PROFITS of $237 Billion.
Subjects like this one provide never missed opportunities for some site lefties to show their spectacular ignorance. Very entertaining.
Another useless comment for the two-letter troll.
Tell me where I am wrong. Or are just a parrot for Don?
Yeah. You got bupkes.
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RE: “Tell me where I am wrong.”
Here’s a suggestion. Try to think about profits differently.
From your commentary you seem to think of profits as a kind of bonus or surplus, something left over after all the work is done. It is better to think of profits as an input to future production.
Thus, if you use profits to increase production (supply) in order to lower prices, this can actually lead to lower future profits, meaning less future production and having to raise prices.
Solving the puzzle to stay in business is a lot more complicated than merely collecting profits and treating them as disposable income.
I was asking about re being a troll.
But the answer to your comment is to say that oil companies can be both quite profitable and still be fair to their customers.
You seem to think so, but you also seem to misunderstand profits.
I understand them just fine. Companies can use them as they see fit. Be it investment in their own company (buybacks), R&D ( not enough in some cases), resources (new tech or “old” people [employees}, etc.
But they can also pass on some of their immense profits by making things better for their consumers WITHOUT having a major negative effect on their bottom line.
However, one of the key points made in the original post was that blaming Biden for high gas prices is like blaming DJT when it rains. (However, I’m sure TFG would take credit for it if it made him look good. )
RE: “I understand them just fine. Companies can use them as they see fit.”
No, they can’t. That’s why I suggest you think differently about profits by seeing them as inputs to future production.
“No, they can’t.”
so LEGALLY speaking, what CAN’T they do?
I think it is fine for companies to act in their best interests (monopoly issues excepted). However, don’t then blame the president (any president of any party) when this results in higher prices. That seems to be the real problem.
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Nice to see at least one person got the main point of what I was saying.