Biden seizes on high oil profits ahead of the midterms
by Karl Evers-Hillstrom and Rachel Frazin - 11/01/22 3:04 PM ET
The Biden administration is seizing on huge earnings calls from oil companies as it seeks to give voters a response to relatively high gasoline prices ahead of next week’s midterms.
President Biden has repeatedly sought to place blame on the industry for the high prices, but has ramped up its rhetoric in the wake of massive earnings.
And while analysts say that large parts of the price are set by the global oil market, not by individual companies, the optics of massive profits while Americans struggle with inflation gives the administration something to cling to.
In total, seven of the largest oil and gas companies combined raked in nearly $70 billion in third-quarter profits, according to recent earnings reports.
“If these companies were taking average profits on refining, instead of the profits they’re making today, gas prices would come down around 50 cents,” Biden tweeted Tuesday.
BP on Tuesday reported $8.2 billion in third-quarter profits, up from $3.3 billion during the same period last year. The British oil giant announced it would boost its stock buybacks to a total of $8.5 billion this year and pay around $800 million in new windfall taxes enacted by the U.K.
Last week, ExxonMobil reported a record $19.7 billion in quarterly earnings, while Chevron and Shell also posted big numbers — $11.2 billion and $9.5 billion, respectively.
Other energy titans reported huge earnings Tuesday. Marathon Petroleum posted a $4.5 billion profit, an increase of nearly 550 percent compared to last year’s third quarter. Phillips 66 reported $5.4 billion in third-quarter profits, a 1000 percent year-over-year increase.
Biden, during a speech on Monday, criticized the high earnings as a “windfall of war” citing the impact of Russia’s invasion of Ukraine on driving up oil prices.
Since that conflict and other factors drove up oil and gasoline prices, companies have experienced a profit bonanza. The Biden administration has called on them to use that income to reinvest in new oil and gas production, in the hopes of getting lower prices for consumers.
National gas prices are sitting at about $3.76 on average, according to AAA. That’s down from the peak of more than $5 per gallon in June but up from $3.40 one year ago.
In his speech on Monday, Biden threatened a “higher tax on their excess profits” and unspecified “other restrictions” if the companies do not increase production.
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https://thehill.com/policy/3714504-biden-seizes-on-high-oil-profits-ahead-of-the-midterms/
