ICYMI: Moody’s, Shifting energy landscape creates uncertainty for Big Oil. A $613 billion windfall provides options
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The oil industry’s cash on hand comes at high cost to consumers and peril to our planet
WASHINGTON, D.C. – A new analysis from Moody’s Investors Service reports that five oil giants – Exxon, Chevron, BP, Shell, and Total Energies – made record profits since the end of the pandemic, and used those funds to reward shareholders while consumers faced pain at the pump. Between January 2021 and September 2023, these companies’ collective profits measured $613 billion, yet nearly 40 percent went to rewarding shareholders while doing nothing to offset rising fuel and heating costs.
“This report confirms what we already know: appeasing shareholders with high profits is top of mind for Big Oil CEOs, with little regard to how their expansion affects working families, the economy, and the climate,” said Climate Power senior advisor for oil and gas, Alex Witt. “Instead of using massive profits—made on the backs of American consumers—to ease pain at the pump or invest in clean energy infrastructure, Big Oil CEOs are padding their shareholder’s wallets and patting themselves on the back.”
Moody’s analysis indicates that these are some of the highest reported profits Big Oil has seen in the last 10 years. At the same time, the industry is expanding its public holdings in the Permian Basin: Chevron recently announced a $53 billion merger with Hess, and Exxon acquired Pioneer Natural Resources in a $60 billion deal in October.
The report shows that Big Oil’s shameless money grab is a risk to their business, our economy, and the climate. From Moody’s:
The evolving energy landscape remains the central business challenge for the world’s largest rated independent integrated oil and gas companies: BP, Chevron, ExxonMobil, Shell and TotalEnergies. Together, the Big Five generated $613 billion of operating cash flow between January 2021 and September 2023, fueled mostly by high energy prices in the years following the pandemic.
The Big Five’s record profits and cash flows have enabled significant returns to shareholders, bolstered their balance sheets, and put them in a stronger financial position to respond to a future erosion in demand for fossil fuels. How the Big Five allocate capital and manage debt — while navigating competing global priorities around energy security, affordability and energy transition — will be key for their future credit quality.