Many Big Oil companies are reporting their biggest annual profits ever as they release their results for the fourth quarter of 2022. ExxonMobil reported the highest profits to date for any Western oil company with $59.1bn. Shell announced the biggest profits in the company’s 115-year history ($39.9bn) and Chevron ($36.5bn), TotalEnergies ($36.2bn) and BP ($27.7bn) similarly set new records.

The Baytown Exxon refinery on March 23, 2006 in Baytown, TX. Big Oil saw record profits in 2022.
The Baytown Exxon oil refinery in Baytown, Texas, US. (Photo by Benjamin Lowy/Reportage via Getty Images)

Oil companies have seen soaring quarterly profits this year, with oil prices sharply rising following Russia’s invasion of Ukraine.

“Of course, our results clearly benefited from a favourable market but, to take full advantage of the undersupplied market, our work began years ago, well before the pandemic, when we chose to invest counter-cyclically,” said Darren Woods, ExxonMobil’s CEO, during an earnings call with investors. “We leaned in when others leaned out.”

The profits add up to $199bn and are even higher than analysts predicted. Financial markets expert Refinitiv estimated that ExxonMobil, Chevron, BP, Shell and TotalEnergies would together haul in $190bn in 2022.

Most of Big Oil, Shell excepted, ended the year with lower profits in the fourth quarter compared with the previous quarter. BP saw the largest downfall in profits, from $8.2bn in the third quarter to $4.8bn in the last quarter of 2022. The lower profit rates are mostly down to lower fossil fuel prices in the last few months of the year compared with the peak that followed the Russian invasion. BP blames the lower fourth-quarter results on “a below-average gas marketing and trading result”.

During 2022, the five Big Oil companies more than doubled their profits compared with the year before. The record earnings have raised scrutiny about the companies benefitting from war and the energy crisis at a time of increasing energy poverty in many countries and a need for an accelerated energy transition if the world wants to meet Paris Agreement targets.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In September 2022, the EU passed emergency legislation containing a temporary ‘windfall tax’ of 33% on fossil fuel profits. Oil giant ExxonMobil filed a lawsuit in response to the tax, arguing it is not within the legal authority of the EU and will discourage investments. In its 2022 earnings report, Exxon says it could have earned $1.3bn more and partly blames the EU tax for the loss. The US government has threatened a similar windfall tax on oil profits.

“Oil companies’ record profits today are not because they are doing something new or innovative,” remarked US President Joe Biden in October when third-quarter earnings were released. “Their profits are a windfall of war – the windfall from the brutal conflict that is ravaging Ukraine and hurting tens of millions of people around the globe.”

Instead of investing in the transition to clean energy, the oil companies are using the record profits to reward shareholders and invest in stock buybacks. Chevron has announced a $75bn share buyback programme and Exxon has revealed a $50bn repurchase plan. Shell paid out $6.3bn to shareholders in the last months of 2022 and said it plans another $4bn share buyback. BP has increased the payout to shareholders by 10% and TotalEnergies raised its dividend and has announced a further $2bn buyback of shares.

Meanwhile, BP has announced the company will lower its climate ambitions as it is increasing oil and gas investments. BP now aims to cut carbon emissions from its oil and gas production by 20–30% by 2030, down from its initial 35–40% target.

Shell reported investing around $3.5bn in its renewable energy division in 2022, or 14% of its total $25bn capital expenditure. However, on 1 February, non-profit Global Witness filed a complaint with the US Securities and Exchange Commission, the US agency charged with investor protection, accusing Shell of mislabelling its investments and inflating its renewable energy spend in 2021. Global Witness says the company only spent 1.5% ($288m) of its Capex on solar and wind power generation in 2021, instead of the 12% it advertised, and that most of Shell's “Renewable and Energy Solutions” spend went to gas-related activities.

“Shell shouldn’t get away with using its tiny investments in renewables as a fig leaf to cover up the reality that it is continuing to profit from the energy crisis at the expense of people and the planet,” said Zorka Milin, senior adviser at Global Witness, in a press release. “We call on the US authorities to hold Shell to account and to set a precedent to ensure other fossil fuel companies do not engage in similar greenwashing.”

Shell denied mislabelling its investments and said it is confident its financial disclosures are compliant with US regulations.

[Keep up with Energy Monitor: Subscribe to our weekly newsletter]

In 2021, the International Energy Agency warned there can be no new oil and gas field developments if the world wants to limit global warming to 1.5°C. Recent Energy Monitor analysis showed that the current extraction plans of the world's leading oil and gas producers would alone already blow almost all of the world’s remaining carbon budget for that target.

Big Oil itself is signalling the end of oil. BP’s Energy Outlook 2023, which was published on 30 January, suggests that while oil is expected to continue to play a major role in global energy for the next 15–20 years, oil demand has already peaked and will only decline in the coming decades.

ExxonMobil, Chevron, BP, Shell and TotalEnergies could have used their record profits to invest heavily in the energy transition. Instead, the oil majors continue to plan and develop new oil and gas fields.

In 2023, Big Oil's profits are expected to decline by around a quarter compared with 2022, according to S&P Global IQ. The market intelligence company expects the five oil majors will earn $150bn this year. While this would not set a new record, profits would still be higher than in the past two decades.