Big Oil Puts Debt Reduction Ahead of New Investments
US Crude Oil Inventories Still in Freefall What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the… The world’s biggest oil and gas companies have posted another strong quarter, with just Europe’s top six majors booking a collective$38 billionfor the July-to-September quarter.
Adding Exxon and Chevron, the figure swells considerably.
But the supermajors are in no rush to start spending that windfall.
The oil and gas industry is having the exact opposite year to 2020.
The war between the United States and Israel, and Iran has pushed oil and gas prices to the highest in years.
The war between Russia and Ukraine, meanwhile, has driven refining margins to all-time highs, adding to refining disruption in the Middle East.
The combination of developments has driven Exxon’s third-quarter profit uptwofoldfrom a year ago, Chevron hasbookedtriple the profit it booked for last year’s third quarter, and BP hasreportedits highest quarterly profit in its long history.
Normally, with these formidable profits, Big Oil should be looking for ways to spend it.
Analysts call it a supercycle, and supercycles drive super investments.
This time, Big Oil appears to be focusing on paying down debt, repurchasing stock, and being picky about new investments.
Indeed, BP even suspended its share buyback program to cut debt faster—and it has, slashing the total by as much as $10 billion, with the remaining pile now at $13.9 billion.
Big Oil appears to be approaching its strong year with a sober mind.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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