Global oil major ExxonMobil Corp on Tuesday informed it reaped a record net profit of $56 billion last year as oil prices touched record highs due to the ongoing Russia-Ukraine war.
Exxon beat its own record of $45.2 billion in profits set way back in 2008 when oil prices hit $142 a barrel. Moreover, the figure was more than double the profit it managed in 2021 ($23 billion).
“Overall earnings and cash flow were up pretty significantly year on year. So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control,” Kathryn Mikells, Exxon CFO was quoted as saying by Reuters.
After Exxon released its earning report, the White House responded and said it was ‘outrageous’ that a western oil company recorded such profits while ordinary Americans suffered.
“It’s outrageous that Exxon has posted a new record for Western oil company profits after the American people were forced to pay such high prices at the pump amid Putin’s invasion,” said Abdullah Hassan, White House assistant press secretary.
Much of the criticism for oil companies such as Exxon stems from the fact that they use the profits to repurchase the shares, distribute dividends, instead of increasing the production capacity which could bring down the prices.
“The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plow those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability,” added Hassan.
With Exxon managing record profits, the debate regarding levying a windfall tax on the company has once again gained pace as critics demand more scrutiny of oil companies.
While the US is yet to take a call, the European Union imposed a windfall tax on the company in Q4 which reduced its earnings by $1.3 billion.
The Texas-based American company is currently suing European Union in a bid to block paying the tax.
Notably, windfall tax is designed to tax the profits a company makes from an unprecedented event. In this case, the Russian invasion of Ukraine has led to an increase in energy prices which has driven up Exxon’s profit numbers.
(With inputs from agencies)