The $56 billion record net profit for Exxon Mobil Corp. in 2022, a record high for the business and the whole Western oil sector, infuriated the White House on Tuesday. Due to high prices and increasing demand, oil majors are anticipated to surpass their yearly records, bringing their total revenue to nearly $200 billion. The size has led to fresh criticism of the oil sector and proposals for other nations to tax businesses’ windfall profits.
According to a White House statement, Exxon’s profit margin is incredibly offensive, given that Americans are paying record-breaking prices at the pump. It condemned Republicans’ attempts to advance legislation helping the oil sector in the House of Representatives. With the most recent earnings reports, the oil companies have all the resources necessary to increase production, including record profits and thousands of unused but approved permits. Still, instead of investing those profits in lining the pockets of executives and shareholders, the White House said.
For most of the last year, President Joe Biden has criticised oil firms and refiners for making enormous profits while gas prices rose. According to a copy of the letter obtained by Reuters, Vice President Biden complained in a letter to CEOs of significant oil refiners in June that they had reduced production to boost profits.
Kathryn Mikells, CFO of Exxon, responded to mounting criticism over the industry’s windfall profits by arguing that more taxes are not the solution.
“We look at the EU tax on the energy industry, and you know, attempting to tax something when what you truly need is for it to rise is just illegal and terrible policy,” Mikells added. “It does the exact opposite of what you’re aiming to do.”
Exxon earlier reported $56 billion net profit
Exxon Mobil Corp, which earned roughly $6.3 million per hour in 2018, reported a $56 billion net profit for 2022, marking both a business record and a record high for the Western oil sector.
Due to rising demand and high oil prices, oil majors are anticipated to surpass their yearly records, bringing their total revenue to nearly $200 billion. The size has led to fresh criticism of the oil sector and proposals for other nations to tax businesses’ windfall profits. Exxon’s profits were much better than the then-record $45.2 billion net profit it posted in 2008 when oil hit $142 per barrel, 30% more than the previous year’s average price. The epidemic led to significant cost reductions, which helped boost revenue last year.
According to Exxon Chief Financial Officer Kathryn Mikells, “overall profits and cash flow were up very dramatically year over year.” That resulted from solid markets, outstanding throughput, strong production, and excellent cost control.