London, (Business News Report)|| International oil companies have achieved fantastic profits during 2021, after the setback of the Coronavirus pandemic that lasted nearly two years.
Expectations that oil companies will record more gains, in light of the continuous rise in prices due to tensions between Russia and the West, are rising.
Oil prices have reached high levels that oil companies have not experienced in more than seven years, as Brent crude is trading at $92 a barrel.
Many oil companies achieved gains, which were reflected in their shares and energy indicators in the global financial markets, especially the American and European ones.
ExxonMobil recorded the highest profits in nearly eight years in 2021 with $23 billion. This is compared to losses of more than $22 billion in 2020, according to a statement issued in early February.
A large percentage of the company’s profits came during the last quarter of last year, at a value of $8.8 billion. This is equivalent to 38.2 percent of the total profits for the year, supported by the strong rise in oil prices during the last months.
Shell achieved strong profits amounted to $20.1 billion, compared to sharp losses of $21.7 billion in 2020, according to a statement issued by the company at the end of last week.
Chevron recorded profits not seen since 2014, amounting to $15.6 billion, compared to losses of $5.5 billion in 2020.
More than a third of the profits were achieved in the last quarter of 2021. It witnessed recording profits of $5.5 billion, compared to a loss of $665 million in the same period of the previous year.
In the east, data issued by the Chinese oil giant PetroChina at the end of last January revealed that the company’s net profit for 2021 amounted to about $11.8 billion, compared to $2.99 billion in the previous year.
Average price
With the imposition of closures around the world in 2020, oil prices collapsed significantly. They fall even below zero for a short period, but prices rose again.
The average price of oil in the last quarter of 2021 was about $77.1 per barrel, an increase of 81% over the average price of oil in the corresponding period of 2020. At the time, the price of a barrel was about $42.7.
At the end of last January, Bloomberg quoted Chevron CEO Mike Wirth as saying that oil prices are expected to reach more than $100 within months, as geopolitical risks and tight supplies affect its global markets.
Wirth pointed out that demand for crude is growing faster than production as the world recovers from the pandemic.
Unlike in recent years, international policies, such as Russia’s military build-up near Ukraine, have begun to create fear in the markets as well, he added.
The market values of the companies benefited from the jumps in crude prices. Five entities: ExxonMobil, Chevron, Shell, Total, and Saudi Aramco achieved an increase in their market values by nearly $240 billion during last year.
Their market value reached about $2.7 trillion.
In light of the profits achieved, most companies also announced plans to invest tens of billions of dollars to develop projects and increase production during the current year.
These policies give conflicting signals about the “zero carbon” directions by 2050, which were adopted by the International Energy Agency last year, and were also supported by the major countries to which most of the giant oil companies belong.
