Big Oil Puts Debt Reduction Ahead of New Investments

The world's largest oil and gas companies have reported a strong third quarter, with combined earnings of $38 billion for Europe's top six majors. Exxon and Chevron together contributed significantly to this figure. Notably, the oil and gas industry is experiencing a contrasting year compared to 2020, as the conflicts between the US and Israel, and Russia and Ukraine, have led to soaring oil and gas prices to record highs.

Additionally, refining margins have reached unprecedented levels due to disruptions in the Middle East. Consequently, Exxon's profit has doubled from the previous year, Chevron has tripled its profit from last year's third quarter, and BP has reported its highest quarterly profit ever. Despite these substantial profits, Big Oil companies are prioritizing debt reduction, stock repurchases, and cautious investments.

BP has even suspended its share buyback program to accelerate debt repayment, reducing its total by up to $10 billion, leaving a remaining debt of $13.9 billion. This cautious approach to their record profits indicates that Big Oil firms are cautious about the industry's long-term prospects, suggesting that they remain uncertain about the industry's future.