Big Oil’s Windfall Creates a Quandary for the Industry
What will the companies do with all their cash? Probably not drill more to help lower gasoline prices.
Something the oil companies probably won’t spend their extra money on.
Photographer: Luke Sharrett/BloombergI hope you’re sitting down for this news: Oil companies look set to make a lot of money. I know. But trust me, this year, it’s really a lot of money.
Six of the largest Western oil producers — BP Plc, Chevron Corp., ConocoPhillips, Exxon Mobil Corp., Shell Plc and TotalEnergies SE — are expected to generate free cash flow, after capital expenditure, of $163 billion this year.1 That is virtually double what they made in 2008, when oil prices hit their all-time peak of almost $150 a barrel, and they actually produced slightly more oil and gas.2Their smaller competitors in the U.S. exploration and production business are also in for a big year.