Europe's six largest oil majors booked a combined $38 billion in Q3 profit, yet the industry is focusing on debt, buybacks and selective investment rather than major new spending. Some observers read the caution as doubt about the long-term outlook, while forecasts for peak oil demand remain divided.
Europe's six biggest oil majors booked a combined $38 billion for July to September. Adding Exxon and Chevron would raise the figure further, but the supermajors are in no rush to spend the windfall.
War lifts profits across the sector
The war involving the United States, Israel and Iran has pushed oil and gas prices to the highest in years. Meanwhile, the war between Russia and Ukraine has driven refining margins to all-time highs, according to the same report.
As a result, Exxon's third-quarter profit rose twofold from a year ago. Chevron booked triple its profit from last year's third quarter, and BP reported its highest quarterly profit in its history.
Debt and buybacks take priority
Big Oil appears to be focusing on paying down debt, repurchasing stock and being picky about new investments. BP suspended its share buyback program to cut debt faster, reducing the total by as much as $10 billion and leaving $13.9 billion.
Some observers see a sign that the industry remains wary of its long-term prospects. According to Reuters columnist Ron Bousso: "Big Oil has so far shied away from major new spending", he wrote.
Demand forecasts diverge
Not all agree within the industry. TotalEnergies now expects oil demand to peak between 2035 and 2040, after previously expecting a peak after 2040.
Vitol, by contrast, has forecast that oil demand will keep growing until 2040, citing slower than expected global adoption of electric vehicles. Big Oil may be preparing for weaker long-term demand, or it may simply be following priorities set by the 2020 crisis: fiscal discipline and shareholder rewards.
Source: Oilprice.com
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