Major oil and gas companies achieved a profit of $38 billion in the third quarter of this year. This figure only pertains to six major European oil companies, and with the addition of ExxonMobil and Chevron, this number significantly increases. Nevertheless, major oil companies are in no rush to spend this profit.
Current Oil Market Situation
The oil and gas industry has performed inversely compared to 2020 this year. The war between the United States and Israel and Iran has pushed oil and gas prices to their highest levels in recent years. Additionally, the conflict between Russia and Ukraine has driven refining margins to their highest historical levels and caused disruptions in refining in the Middle East.
Read more: Hamid Bord announced the reconstruction of damaged oil industry facilities
These developments have led to ExxonMobil's profit in the third quarter doubling compared to last year, Chevron recording three times last year's profit, and BP reporting its highest quarterly profit in history. Typically, with such significant profits, major oil companies should be looking for ways to invest. Analysts refer to this situation as a super cycle that leads to large-scale investments. However, this time, major oil companies seem to be focusing on paying down debt, buying back shares, and carefully selecting new investments.
Debt Reduction Trend
BP has even halted its share buyback program to reduce debts more quickly. The company has reduced its debt by $10 billion so far, and the remaining debt now stands at $13.9 billion. It appears that major oil companies are approaching their strong year with a rational mindset. Some observers believe that this approach to large profits is a sign of caution from major oil companies regarding the long-term outlook of the industry.
Forecasts indicate that major oil companies are well aware of the market situation and likely do not want to simply rely on these profits. While the long-term outlook for oil and gas is clearly brighter than it was two years ago, some companies like TotalEnergies have revised their oil demand forecasts and now expect peak demand to occur between 2035 and 2040.
Read more: Mild growth in natural gas futures prices following production fluctuations and cheap purchases · XRG completed a $1.45 billion share purchase in Shell's North West Shelf project
