Oil companies in the U.S. are set to have a record Q1, with earnings surging by 50% year-over-year at the world’s biggest company, Exxon Mobile, according to the Wall Street Journal.Chevron and ConocoPhillips are also set to experience profit booms, with a rise of around 33% year-over-year for Q1.
But this isn’t just about rising oil prices. It’s also about the spread between the price of oil in the U.S. and Europe, according to the WSJ.
Essentially, these big integrated oil companies are producing oil in European prices Brent), then refining it in American prices (WTI). Because this keeps prices somewhat protected from the broader spike, they’re able to make more money on the refined product when they sell it at American markets. That means refining profits are going to be better this time around, then they were for Exxon in their record 2008.
So Exxon’s record quarter from that year could be back, and the “windfall profits tax” argument may be just on the horizon. But a broader sense of anti-oil industry sentiment is sure to rise over the next few quarters, if prices and profits continue to increase. Already, some are trying to make money off of this growing public sentiment.