BP shares, Saudi Aramco shares, ExxonMobil shares & Co. in focus: Biden threatens excess profit tax before election

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Meanwhile, government criticism has not stopped: US President Joe Biden brought up an excess profits tax in his country before the congressional elections.

The British group BP wrote the second-highest quarterly profit ever in the past quarter. Adjusted net income rose to $8.15 billion, the company announced on Tuesday. That was significantly more than experts had expected. A year ago, the group reported adjusted earnings of $3.3 billion.

The Saudi Arabian state-owned company Aramco (Saudi Aramco) earned a total of 41.6 billion dollars, around 40 percent more than a year earlier. This is the second-largest net profit since the IPO, the company said. Only between April and June was it larger at $48 billion.

As a result of the Russian invasion of Ukraine, oil prices had initially risen to their highest level in 14 years. Because inflation and the tighter monetary policy of central banks slowing down the global economy, they then declined. A barrel of North Sea Brent cost 94.81 US dollars on Tuesday, around a fifth more than at the beginning of the year.

Other companies are also benefiting from the increased prices. US oil industry leader ExxonMobil had presented the largest quarterly profit in its company history. Competitors such as Chevron, Total (TotalEnergies), Repsol and Shell (Shell (ex Royal Dutch Shell)) clearly exceeded the billions in profits of the same quarter of the previous year.

While investors benefit from the profits, dissatisfaction is growing among politicians, who are struggling with the effects of inflation and rising interest rates. As a result, the UK already has an excess profit tax affecting Shell and BP.

Now Biden also brought such a tax into play. “The oil industry has a choice. Either it invests in America by lowering consumer prices at the pump and increasing production and refining capacity. Or it pays a higher tax on its excess profits and faces further restrictions,” said Biden on Monday. Those who make such high profits have a responsibility to act in the interests of consumers, society and the country. His team will work with Congress to explore options.

Biden had previously voiced his displeasure with share buybacks and dividends, and urged oil companies to put more money into production. Biden’s Democrats want to defend their majorities in the House of Representatives and Senate in next week’s congressional elections. However, even with a narrow election success, an excess profit tax will hardly have a chance in Congress./jwe/DP/stw

LONDON/RIAD (dpa-AFX)

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