Ask anyone who owns a business, or has ever owned one, what their top priorities should be. “Making a profit” should be really close to the top of the list, if not #1 on most of them. A business cannot survive without a profit, cannot pay employees, maintain infrastructure, conduct research, do all the things a business needs to do to stay in business. So, where does a business draw the line between “successful” and “taking advantage”? We are currently having this debate in public, at least some of us are. Others are bypassing the discussion and going straight for the blame, with fingers being pointed in several directions.

Big Oil. Can’t live with them, can’t live without them. Like so many other things in our lives, oil companies deserve our support, while they also deserve to be held accountable for their actions. They need to be encouraged to pay their employees well, to maintain their equipment, to develop new fields and ways to drill, and to make a decent profit on top of all of this. We need oil companies to provide fuel for our vehicles and to heat and cool out homes. We need them, but we need to be able to afford to buy their products. After all, if they don’t produce a product, we can’t buy it. If we can’t afford to buy their product, it won’t matter how much they produce. Catch 22. Supply and demand. We need each other.

In 2020 Covid 19 drastically altered our everyday life. On January 21 the first case of Covid was confirmed in the United States; then, by March the virus had been declared a National Emergency with travel restrictions beginning. The unemployment rate was 3.5% when the Government shut down the economy, implementing “essential worker” policies in an effort to contain the Covid pandemic. By the end of April the unemployment rate had reached 14.7%, and the CARES Act was sending checks to every American adult. Many Americans were struggling to pay bills and buy groceries, with most being temporarily laid off from work. No commute to work, no need to buy gas. Not buying gas, the gas supply peaked, and prices dropped from $2.54 in January to a low of $1.84 in April before partial reopening of businesses supported price increases to $2.19 by December.

According to the “Oil and Gas Journal”, the five supermajor oil companies…ExxonMobil, BP, Shell, Chevron, and Total… combined for a record $76 billion loss in 2020. There was plenty of supply but little demand. Naturally, the businesses went into survival mode; they began shutting down production, taking producing rigs offline, closing pipelines, laying off employees.

2021 found the American economy beginning to recover from Covid. ExxonMobil, the largest of the big five oil companies, earned $2.7 billion in the 1st quarter, then continued to improve through the year, posting an $8.7 billion profit in the 4th quarter of 2021 totalling $23 billion for the year. The other four of the big five showed similar profits, seeming to recover nicely from the losses in 2020, with Chevron making $15.6 billion, BP $12.85 billion, and Shell, the only big company to report a profit in 2020 ($4.5 billion) posting $19.29 billion for 2021.

And slowly, very slowly, some of those producing wells that were shut down in 2020 were being brought back on line.

By the end of 2021, demand was greatly outpacing supply, with gas prices rising from $2.33 in January to $3.30 in December.

Which brings us to today’s predicament…the unemployment rate is holding steady at 3.6%, businesses are actively looking for workers. Those who want to work can find a job. The oil companies, for the 4th month in a row, have brought a few previously producing wells back into production. The bad news? The oil we had been importing from Russia,, reported to have been 8% of our total, is no longer being imported due to Russia’s invasion of Ukraine. On top of that, we have increased out oil exports to countries also doing without Russian oil up to 10.6 million barrels per day as of April 15. Apparently, the big oil companies are making more profit by sending oil overseas than they would be by keeping it.

The Earnings Statements for 1st quarter 2022, show that the oil business has recovered nicely from their losses of 2020. Shell posted $7.3 billion profit, BP $6.2 billion, ExxonMobil $5.48 billion, and Chevron $6.26 billion. Demand for refined oil is rising with supply not keeping pace. The price of crude oil has jumped from $64.60 in May 2021 to $112.65 as of May 23, 2022. Meanwhile, the price we pay at the pump has risen from $2.85 in April 2021 to $4.11 in April 2022.

Every business deserves to make a profit. Every business. I just hope they don’t kill the Golden Goose.