While we struggle to pay our bills, oil companies are making record profits

While the energy crisis is affecting private households and small businesses in particular, the big oil companies such as Exxon, Shell, Total and BP are benefiting. The topic of climate protection was been also pushed into the background.

Oil giant Exxon raked in $56 billion in profits last year, Reuters reports. That is 140% more than in the previous year. According to the German newspaper Tagesschau, Shell had the best financial year in its entire history.

However, the climate targets are suffering: BP has corrected its climate target downwards and intends to reduce its oil production by 2030 by only 25% instead of the announced 40%. Previously, BP was a pioneer in the industry with these ambitious climate targets.

It's not just rising energy prices that are giving oil companies these incredible profits. University of Massachusetts economist Isabella Weber says low production costs also play a role.

During the COVID-19 pandemic, there had been a demand deficit, to which oil companies responded by suspending production at high-cost plants.

In the meantime, the economy had recovered from the pandemic, which caused the demand for oil to rise again. At the same time, the sanctions against Russia in connection with the Ukraine war led to a shortage of supply.

The oil companies' record profits are provoking criticism around the world. Back in March last year, US President Joe Biden said, according to Reuters' Kevin Lamarque, that oil companies were enjoying record profits while citizens were paying high energy prices. Biden appealed to the oil giants: "This is not the time to sit on record profits, but to stand up for our country."

In France, too, a discussion arose about the fact that the oil giant total was enriching itself at the expense of the environment, while at the same time the employees were not sharing in the profits.

On February 8, activists in France protested in front of the TotalEnergies headquarters in Paris. They held banners criticizing "super profits" and vandalized the building with red paint.

In London, Greenpeace activists protested British energy giant Shell's record profits by posting a replica price board at a Shell petrol station, showing the energy giant's net profit for 2022.

Not only are the oil companies the target of protests. On February 11, numerous Dutch people demonstrated in Amsterdam against rising energy prices. The focus here was on the electricity producer Vattenfall.

In the autumn of 2022, the European Union (EU) passed the resolution that the record profits of the oil companies should be taxed with a so-called excess profit tax. The money raised with this tax should be used to relieve citizens and companies financially.

According to The Guardian's Richard Partington, ExxonMobil has appealed the EU's decision. The US energy company disputes the associated legal authority.

In Germany, the energy crisis had led to an increase in energy prices of almost 25% (compare December 2022 to December 2021), according to the Federal Statistical Office.

High energy prices have contributed to rising inflation around the world. In Germany, this share was larger than in the USA, since the country is dependent on importing energy products. In the USA, on the other hand, oil and gas are produced domestically and some are exported. At the same time, these products are traded in US dollars, which is why the euro-dollar exchange rate means that inflation is felt more strongly in Germany, according to Growney's financial experts.

According to the Federal Statistical Office, the inflation rate in Germany in January 2023 was just under 9% and consumer prices rose by 1% compared to the previous month. In the US, however, the inflation rate in the first month of this year was only 6.4%, as reported by Trading Economics.