Global oil companies have rebounded since the pandemic to post their highest ever profits since people started using petroleum.

Chevron, ConocoPhillips, Exxon and Shell all reported record profits in 2022 — a year in which Russia’s war on Ukraine collided with the post-pandemic economic recovery to drive oil prices to their highest levels in history. 

Together, the four companies saw $1 trillion in sales last year, a sum greater than the total economic output of Colombia, South Africa or Switzerland. TotalEnergies and BP are set to report their 2022 financial results next week. 

The record profits come after a year of skyrocketing gas prices. After slumping hard in 2020, global consumption of oil and gasoline bounced back far slower than production, putting pressure on gas prices. Russia’s invasion of Ukraine a year ago further shrank the world’s oil supplies, bringing the average price of gas in the U.S. above $5 a gallon in the spring and summer.

Shell on Thursday reported a nearly $40 billion profit for last year. That’s more than double the prior year’s results and the most money Shell has ever made in its 115 years of existence. Chevron, the second-largest oil company in the U.S., posted record earnings of $36.5 billion last year, while refiner ConocoPhillips doubled its profits to $18.7 billion, the highest in the 10 years since it spun off its refining business.

Exxon, the largest U.S. oil producer, this week reported an epic $55 billion in profits for 2022. The oil giant’s bottom line “clearly benefited from a favorable market,” CEO Darren Woods told investors. He also touted Exxon’s investments before and during the pandemic, which allowed it to increase production as demand was ramping up. 

“We leaned in when others leaned out, bucking conventional wisdom,” Woods said. 

The windfall makes Exxon the third-most-profitable company of 2022, behind only Apple and Microsoft, according to the Wall Street Journal.

In addition to high prices for crude oil, elevated natural-gas prices and high margins in the refining business also pushed up oil company profit, said Peter McNally, industrial and energy analyst at Third Bridge.

“Windfall” profits

The White House and environmentalists have condemned oil companies’ ballooning profits. The White House has criticized fossil-fuel companies for not increasing production to help bring down gas prices, and last year floated a tax on oil and gas profits. 

A White House spokesperson called Exxon’s record profit “outrageous” in a statement to the BBC. The spokesperson, Abdullah Hasan, also blasted Chevron’s announcement that it would spend $75 billion on buying back stock from investors.

“Companies clearly have everything they need — record profits and thousands of approved permits — to increase production. The only thing getting in the way is their own decision to keep plowing windfall profits into the pockets of executives,” Hasan tweeted.

“A windfall tax on oil and gas profits is needed more than ever, to free up money that’s desperately needed to help those struggling with the cost of energy, and as economies around the world face recession,” Jonathan Noronha-Gant, senior campaigner with Global Witness, told the Associated Press.

Some jurisdictions, including the European Union and the U.K., have imposed such taxes on surplus energy-company profits, putting the proceeds toward covering citizens’ skyrocketing energy costs. In December, Exxon sued to stop the EU’s tax.

“We looked at what happened in the EU and said it both is not legal and it’s the opposite of what is needed,” Woods said Tuesday, calling the tax “a penalty on the broad energy sector.”

Dramatic turnaround

Oil companies have seen a remarkable turnaround from 2020, a year when travel ground to a halt, demand for fuel evaporated, dozens of oil and gas companies filed for bankruptcy protection, and thousands of industry workers were laid off. Exxon lost $22 billion that year — the first year in decades that it had lost money.

In addition to oil-extracting operations that were taken offline in 2020, refining capacity also fell, contributing to higher gas prices and refinery profit margins.

“The refining business, particularly in the U.S., soared to record levels,” McNally, the Third Bridge analyst, said. “The price of crude oil went up but the prices of refined products like gasoline and diesel went up even more. The largest U.S. independent refiner, Marathon Petroleum, delivered record profits, but ExxonMobil and Chevron also compete in refining.”

The Associated Press contributed reporting.