White House Slams Exxon’s Record Profit As ‘Outrageous’
The White House continues to express indignation at Big Oil as the U.S. supermajors continue to report record earnings for 2022, with ExxonMobil the latest target of the Biden Administration’s criticism. ExxonMobil (NYSE: XOM) reported on Tuesday $55.7 billion in earnings for 2022 in a record-breaking earnings tally for any Western oil supermajor ever. High oil and gas prices were the key reasons for higher profits at Exxon, which beat its own annual earnings record of $45.2 billion from 2008 – when oil prices hit a record $142 per barrel – and posted the highest-ever annual profit by a major Western oil firm. The reaction from the White House was quick. “It’s outrageous that Exxon has posted a new record for Western oil company profits after the American people were forced to pay such high prices at the pump amidst Putin’s invasion,” White House spokesperson Abdullah Hasan said in a written statement, as carried by The Hill. “The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plow those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability,” the White House said. Referring to the record earnings at Exxon, President Biden said on Twitter, “The only thing stopping Big Oil from increasing production is their decision to pay shareholders billions instead of reinvesting profits.” “Instead of demanding accountability, Republican officials are blaming us. I’m doing my part to lower prices, it’s time Big Oil did theirs,” the president said. That’s the second time in less than a week that the White House has slammed corporate decisions at oil firms. Last week, when Chevron announced a $75 billion share buyback program, Hasan said, commenting on the news, “For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it.” On Friday, Chevron also reported its highest annual profit ever as its adjusted earnings for last year more than doubled from 2021 to hit $36.5 billion on the back of higher oil and gas prices and record U.S. production.
Russian Oil Companies Told To Comply With Ban On Oil, Oil Product Exports
Russian Prime Minister Mikhail Mishustin has signed an agreement demanding that all Russian oil companies comply with a previous order that disallows any exports of Russian crude oil or crude oil products to any buyer that adheres to the price cap mechanism. It should be noted that Russian companies failing to comply will face no penalties, according to Upstream. Mishustin’s resolution, signed this week, bans Russian oil producers from signing sales contracts with any buyer engaged in the price cap clause imposed by the G7. The resolution calls on producers to submit a declaration to Russian customs for each cargo sold, attesting to the fact that the price-cap mechanism hasn’t been used. Russian customs, then, will review old and new crude oil export contracts—and customs reserves the right to stop any cargo that violates Putin’s decree. Even more convoluted, the decree requires all Russian crude producers to track the progression of the seaborne cargoes from the point of origin to its final destination, which means they will have to obtain and review contracts from third parties every time the crude changes hands along the journey, to make sure the price cap clause isn’t included. If a producer discovers that the price cap clause is included in some paper after the crude oil has left the point of origin, it has 30 days to remedy the violation, with five additional days granted to notify customs if they were unable to fix it. Again, there are no stated penalties for failing to comply. Last month, Russia shipped crude oil to India under the price cap mechanism in what was the first sign that the oil-producing giant could acquiesce to the Western criteria.
WoodMac: $100 Price Cap On Products Won’t Cripple Russian Refiners
The Western-invoked price cap on Russian refined products coming into effect on February 5 won’t “severely impact” Russian refiners, WoodMac said on Tuesday. Mark Williams, WoodMac’s Research Director of Short-Term Refining & Oil Products, said that the oil products cap would have a minimal impact of Russia’s refining runs and distillate exports. “With Russian Urals trading at US$40/bbl on an FOB basis, capping the price at US$100 per barrel and US$45/bbl respectively would still see Russian refining margins of US$20-US$30 per barrel,” Williams said, adding that “At these levels, Russian refining economics are still very strong, so the incentive to refine crude into oil products remains high.” According to WoodMac’s Alan Gelder, VP of Refining, Chemicals and Oil Markets, Russia’s refiners could have a difficult time finding other barrels for its distillates that typically go to Europe. But if the price cap ends up being as high as it is proposed to be, Russia could still afford to discount its distillates by $200 a tonne vs. market benchmarks before it was uneconomical. Gelder sees the next few months are particularly volatile as trade flows reshuffle, with potential buyers choosing to forgo their reputation to get their hands on cheap Russian diesel. Still, “We do not see the price caps having any additional impact on trade flows at the currently proposed levels, but if flows to new markets continue to develop as pricing discounts widen there remains an upside risk to both Russian refining crude runs and distillate exports in 2023,” Gelder added. The $100 proposed price cap is being considered after the G7 came up with a range of prices based partially on the price of Russian crude oil, which is already subject to a price capping mechanism.
Reliance stops local petcoke sales, boosts imports -sources
Reliance Industries (RELI.NS) has stopped selling petroleum coke within India and boosted imports of the product to turn it into synthetic gas to power its refineries, according to two sources familiar with the matter and trade data. Petroleum coke is a carbon intensive solid residue left over from coking units in oil refineries that break down residual oil into more highly valued products. Petcoke, as it is known, can be used as a coal substitute in both steelmaking and in power plants. Reliance had been depending on liquefied natural gas (LNG) to run its refinery complex and selling the petcoke locally but it is now gasifying its petcoke amid rising LNG prices. With Reliance’s petcoke no longer available domestically, India’s imports are likely to rise, after doubling last year because of higher demand from cement makers, who use the petcoke to manufacture the building material. Reliance was the country’s biggest domestic supplier until 2021. “They slowly started reducing supplies (to local markets) in the middle of last year, but now it has come to a complete stop,” one of the sources, a petcoke trader, said. Reliance did not immediately respond to a request seeking comment. Both sources declined to be named as they are not authorised to speak to the media. I-Energy Natural Resources, a solid fuels trader in India’s Gujarat state, said prices of petcoke delivered to India rose last week as cement manufacturers increased their imports since it is still cheaper than overseas coal. “There is a very limited supply of domestic petcoke to end-users, and this has made players to procure from the international market,” I-Energy said in a note on Monday. Trade data reviewed by Reuters shows Reliance also imported over 192,000 tonnes of petcoke in the four months to January amid higher internal demand. That compared with about 110,000 tonnes in the eighteen months ending September. “They have previously bought petcoke from overseas at a discount for internal consumption, and exported the petcoke they produced for a premium,” said the second source, a former Indian buyer of Reliance’s petcoke. “But now, they are using everything they produce and also importing,” the source said.
Economic Survey 2023 sees silver lining in imports as crude oil prices soften
The recent softening in the prices of crude oil augurs well for India’s petro imports, said the Economic Survey of India. “On the imports side, notwithstanding uncertainty surrounding the outlook on global crude oil prices, the recent softening in its prices augurs well for India’s POL (petroleum, oil and lubricants) imports,” said the Economic Survey 2022-23, which was tabled in Parliament by the Finance Minister Nirmala Sitharaman on January 31. Crude oil prices declined to $78 a barrel as of December 2022, while the retail selling price of petrol and diesel moderated due to a cut in excise duty and Value Added Tax (VAT) by the state governments. This comes after energy imports by India jumped in the nine months ended December 2022 as domestic demand remained high amid the global energy crisis. Among imported commodities, the highest surge was reported in petroleum, crude and petroleum products, followed by coal, coke and briquette, according to the data released by the commerce and industry ministry on January 16.