At a speech promoting his administration’s economic agenda in Syracuse, N.Y., on Thursday, he said the average price of gasoline would be 40 cents lower per gallon across the country if oil companies were enjoying their typical profit margins over the last 20 years.
“Last quarter, the five largest oil companies made — in the last quarter — $70 billion in profit in 90 days,” Mr. Biden said. “And Shell announced just this morning that it made $9.5 billion in profits in the third quarter: $9.5 billion. That’s more than twice what they made in the third quarter of last year. And they raised their dividends as well, so the profits are going back to their shareholders instead of going to the pump and lowering the prices.”
Both Exxon and Chevron are keeping to budget targets set before oil prices spiked when Russia invaded Ukraine in February, a move they say is prudent corporate stewardship.
“We plan for thin margins and tough conditions and hope for the best,” Darren Woods, Exxon’s chief executive, said, referring to the company’s critical refining business, during a conference call on Friday with analysts. Nevertheless, he said the company would work to make sure “people around the world and here in the U.S. get affordable and reliable energy,” adding, “We recognize the pain high prices cause.”
For now, domestic demand remains strong. But with high interest rates causing an economic slowdown and raising fears of a recession, oil executives are cautious because they have seen how quickly the tide can turn.
“I tell my guys nothing goes up or down forever,” said Trent Latshaw, president of Latshaw Drilling, a major rig operator in Texas and Oklahoma. “We’re seeing some good times now but how long they will last I don’t know. I have a caution based upon the many near-death experiences I’ve had over the last 20 years.”
During the 2008-9 financial crisis, oil prices dropped from $145 to $35 in five months. In 2014 and 2015, as economic growth slowed, a barrel of oil dropped by more than half in four months, to $45, before climbing again. When the pandemic hit in early 2020, oil prices collapsed, briefly crashing from $18 a barrel to below zero as producers had to pay buyers to take away oil they had no room to store.