Written by Nandita Bose and Garrett Renshaw
WASHINGTON (Reuters) – The White House on Friday launched a fresh attack on U.S. oil companies, accusing them of using profits to pay shareholders rather than increasing supply after Chevron Corp said it had doubled its annual profit for 2022.
Chevron reported a record $36.5 billion profit for 2022 that was more than double the previous year’s profit, kicking off what analysts expect will be a bumper season for global energy suppliers.
Earlier this week, Chevron said it would triple its spending on share buybacks to $75 billion over five years under current guidance. Other oil companies are expected to follow suit.
“It is clear that the companies have everything they need – record profits and thousands of approved permits – to ramp up production,” White House spokesman Abdullah Hassan said in a statement.
“The only thing getting in the way is their decision to keep pumping a windfall into the pockets of executives and shareholders rather than using it to increase supply.”
Under former President Donald Trump, Congress passed large retroactive tax breaks for Big Oil, as demand for the fuel fell during the COVID shutdowns. After oil prices soared in the wake of Russia’s invasion of Ukraine, European governments have imposed windfall taxes on their oil industries, but it is unlikely that US lawmakers will do the same.
Analysts expect Chevron and Exxon Mobil — the country’s largest oil producers — to post record annual profits for 2022 of about $100 billion combined.
Chevron did not immediately respond to a request for comment, and Exxon declined to comment.
Hassan’s comments represent the latest in a slew of attacks from the White House criticizing oil companies for diverting windfall profits to investors. President Joe Biden’s administration unsuccessfully tried several times last year to persuade oil companies to increase production as gasoline prices soared, and Biden ultimately decided to tap the US Strategic Petroleum Reserve (SPR).
Energy Secretary Jennifer Granholm said last week that Biden would veto a bill introduced by Republicans in the US House of Representatives that would limit the president’s power to tap oil reserves if Congress passed it.
US oil producers are generally increasing their budgets for new energy projects this year, but the expenses will be dwarfed by the payments to shareholders.
Last year the energy industry was one of the hottest sectors in the S&P 500 after lagging behind the broader market for years.
(Reporting by Nandita Bose and Garrett Renshaw in Washington; Editing by Heather Timmons and David Gregorio)