Despite the public outcry over the energy crisis, a silver lining emerges as the top five oil giants are poised for a historic windfall. In 2023, these major players, including British Petroleum, Shell, Chevron, ExxonMobil, and TotalEnergies, are anticipated to set a new benchmark by disbursing over $100 billion to their investors.
The Institute for Energy Economics and Financial Analysis (IEEFA) reported that in the previous calendar year, these industry leaders collectively showered shareholders with dividends and share buybacks totaling $104 billion. As highlighted in a Guardian report, these substantial payouts come on the heels of a year marked by extraordinary profits for major oil and gas companies. The global energy markets experienced a significant shift following Russia’s invasion of Ukraine, leading to a surge in the international price of Brent crude and unprecedented gas prices across Europe.
According to financial analysts at IEEFA, despite the impact of lower profits due to weaker commodity market prices, the top companies are projected to surpass their previous shareholder distributions this year. This comes in the aftermath of a record-breaking year for temperatures, with the climate emergency triggering a string of extreme weather events.
Trey Cowan, an analyst at the IEEFA, expressed that based on the current trajectory of distributions through share buybacks and dividends, the five major oil companies are on track to establish a new record for shareholder distributions in 2023. This surpasses the substantial $104 billion spent in the 2022 calendar year.
The choice to provide shareholders with unprecedented payouts during a challenging period for many may intensify public resentment towards oil companies, prompting calls for heightened regulatory measures. Although these payouts may be advantageous for shareholders, their impact on oil prices is expected to be limited, as global market forces predominantly dictate the trajectory of oil prices.