President Joe Biden criticised record energy company profits after Shell announced its second-highest earnings ever while raising its dividend and expanding buybacks.
“That’s more than twice of what they made in the third quarter of last year, and they raised their dividends as well, so the profits are going back in their shareholders instead of going to the pump and lowering the prices,” Biden said at an event in Syracuse, New York.
Biden has repeatedly demanded that oil companies forgo buybacks and dividend increases, calling on them to reduce prices at gasoline pumps for American motorists instead of returning profits to shareholders.
Energy companies, he said, need to “bring down the cost of a gallon of gas that reflects the cost they’re paying for a barrel of oil.”
Biden’s comments drew a swift rebuke from oil industry leaders.
“Refiners do not set the prices consumers pay at the pump or the prices for crude oil,” and are running “facilities as hard as we safely and responsibly can to maximise the supply of gasoline, diesel and jet fuel that Americans and economies around the world need,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers association.
And the American Petroleum Institute suggested the president’s focus was misplaced.
“With energy costs and geopolitical instability around the world continuing to rise, it’s time for Washington to focus on leveraging American energy production to confront the global mismatch between energy demand and available supply that has driven fuel prices higher,” the trade group said in an emailed statement.
A Shell spokesman didn’t immediately respond to Biden’s comments.
A gallon of gasoline cost $3.76 on average in the US on Wednesday, according to the motor club AAA. Shell’s shares rose more than 5% on Thursday, to 2,425 pence in London.
Energy analysts and officials say there is generally a lag between shifts in the prices of crude oil and gasoline, in part because it takes time for costs to filter through the supply chain.
High oil prices are proving a bonanza for multinational energy companies. ExxonMobil is expected tomorrow to disclose the second-highest quarterly profit in the company’s 152-year history.
Democrats, who face headwinds in midterm congressional elections on Nov. 8 in part because of inflation and high gasoline prices, have castigated oil company profits.
“$9.5 billion is a crapload of money,” Connecticut Senator Chris Murphy said in a tweet. “We don’t have to put up with this. But if you elect Republicans in two weeks, they will do the bidding of these guys.”
But Democratic proposals to impose so-called windfall profit taxes on energy companies have repeatedly failed, even when the party controlled both chambers of Congress.
Shell said Thursday it will buy back another $4 billion of shares over the next three months, bringing total repurchases for the year to $18.5 billion. It plans to increase its dividend by 15% for the fourth quarter, subject to board approval.
Shell reported a record profit in the second quarter of $11.47 billion, when oil prices exceeded $100 a barrel. Benchmark Brent crude closed at about $97 on Thursday, up $1.27.
Some of Shell’s peer companies also reported outstanding financial results Thursday. TotalEnergies SE disclosed a record profit, and Repsol SA said it will pay a higher dividend than previously announced.