Why did Chevron just post 36 billion in profits when so many people are struggling to fill up their tanks with the price of gas, how is that even legal?

Why did Chevron just post 36 billion in profits when so many people are struggling to fill up their tanks with the price of gas, how is that even legal?

31 thoughts on “Why did Chevron just post 36 billion in profits when so many people are struggling to fill up their tanks with the price of gas, how is that even legal?

  1. They posted $36 billion in profits because their income – their costs = $36 billion. It’s legal because they’re not guilty of price fixing or having a monopoly.

  2. Those companies bought the oil and gas with insane discounts, but tell us it has to be high because of the war, we have no choice and are forced to buy the gas at whatever price they make it.

    With prices more than doubling and their costs being half, they make insane profits

  3. Until people significantly change their habits to purchase less, there won’t be much incentive for big oil to change business models. It isn’t fair, but it is the current reality. Unfortunately, right now it is something most people would rather complain about than make other sacrifices to their lifestyle.

  4. They’re going to charge more than what the oil costs to produce, that’s how any business operates. There’s plenty of demand for gas at any price up to $5.

  5. Oil runs the world. The world runs on oil. The corruptness of it goes DEEP.

    Energy companies can do whatever tf they want pretty much

  6. Supply went down due the the Ukraine war. The fossil fuel companies said they wouldn’t increase the supply on their end even though they have reserves as the high price suits them.

    They have the money, the lawyers, and lobbying power to get away with that.

    Natural resources are what Marxists call a natural monopoly and most left wing people believe that the government should manage those as they give private entities too much power.

    You’re seeing the consequences of a lack of oversight and regulation mixed with a resource we can’t go without. We also can’t go without it cause the same companies who keep this type of shit legal also keep our infrastructure dependent on them and prevent any move to technology that doesn’t need them.

  7. I dont know about the us, but at least where i live, 80% of the final price of gas, is by taxes and the “pump company” (i dont know how to call them in English)

  8. They also make other chemicals and the chemical industry has been booming the past couple years. Shell shut down a bunch of refineries and is moving away from petrofuel production altogether.

  9. What on earth is going on with this circle jerk? Gas is like $3/gallon these days. Companies like Chevron are the reason why there even is something to put into the tank in the first place. These companies are not a charity.

  10. In the 1970s, laws & regulations changed in the US to make corporations responsible only to shareholders and that directors & executives have a “fiduciary responsibility” to those shareholders. Prior to this, many corporations took the view that their employees were the stuff that the company was responsible for. This lead to the sort of mentality that if you were loyal to your company, your company would take care of you (for life).

    One of the biggest changes as a result of these legal/regulatory changes was that companies went from having pensions to every employee being responsible for their own retirement. 401k plans were originally developed to add “extra gravy” to existing pension plans and your company could only offer a 401k if it already had an existing defined benefit pension plan. 401k plans were never invented to be your sole source of retirement savings. The merger mania and junk bond schemes of the 1980s were a direct result of these legal/regulatory changes.

    Charles Stross (one of my favorite authors) had a long rambling blog post about this issue – that corporations are aliens:

    > *Corporations do not share our priorities. They are hive organisms constructed out of teeming workers who join or leave the collective: those who participate within it subordinate their goals to that of the collective, which pursues the three corporate objectives of growth, profitability, and pain avoidance. (The sources of pain a corporate organism seeks to avoid are lawsuits, prosecution, and a drop in shareholder value.)*

    > *Corporations have a mean life expectancy of around 30 years, but are potentially immortal; they live only in the present, having little regard for past or (thanks to short term accounting regulations) the deep future: and they generally exhibit a sociopathic lack of empathy.*

    http://www.antipope.org/charlie/blog-static/2010/12/invaders-from-mars.html
    http://www.antipope.org/charlie/blog-static/2018/01/dude-you-broke-the-future.html

  11. Because the price fixing is done by countries that are part of OPEC. If the United States gets too uppity they will once again overproduce oil to kill off as many European and American oil companies as possible.

  12. Gas prices are at $3.50.
    Gas taxes are 50 cents in Connecticut or California.
    What price do you think gas prices should be?

  13. Due to world events like the sanctioning of Russia, the fuel situation was destabilized. Chevron spent time and expertise to ride the choppy waters and make fuel available to all. Other companies in other parts of the world did not. So supply went down and Chevron was able to sell for higher prices leading to a lot of profit. I feel if we take away their profits, they will not try as hard to smooth out the fuel issues that they did not create

    On the flip side, there was probably a bit of price gouging and collusion because they can get away with it.

  14. That’s capitalism. See, if something thinks gas should be cheaper, all they have to do is buy some oil-rich land, oil wells, pipelines, oil supertankers, oil refineries, gas trucks, and gas stations, and then they can manufacture and sell gas for less. See how competition keeps prices low? The invisible hand at work! Honestly, I don’t know why more people don’t do it.

  15. The amount of upstream investment (drilling) in the US is way down from 2015. 2020 it went down again and it is still recovering to 2015 levels. There remains a question of how much investment in upstream oil should be made, as investors in oil are increasingly vilified despite the obvious economic need.

    Oil is very transportable. With shipping and terminal fees, it may cost somewhere around $5 to move a barrel from Texas to Europe or elsewhere. Therefore, the price of oil is very similar all over the world. If the difference is larger than the cost to ship it, someone will step in to take advantage of the arbitrage.

    With crude oil prices high, Chevron has a choice- sell oil at cost+margin, or sell at the market price. Selling at market price is the obvious answer. Even if they sold lower, someone else would step in, buy it, and then sell at market price, the consumer would not benefit.

    Costs of production are basically constant, so high oil prices lead to higher profit.

  16. Despite popular perception, individual companies like Chevron don’t control the price of oil. Oil is a global market, and so the price responds to supply and demand. And supply is currently fucked.

    Russia was the third largest oil producer in the world, putting out nearly 12% of global supply, and they are currently being blocked by a good chunk of the West. On top of that, OPEC countries control another 40% of global supply, and they are intentionally manipulating the market by limiting supply in a time of heavy demand to drive up prices. And there’s about jack shit that can be done to them to stop it, since the last time something like that happened was back in the 70s and it was a massive clusterfuck.

    To make it even better, there is massive pressure on oil companies to *not* invest in increasing domestic supply and to instead transition into green energy. Why spend billions of dollars building new oil wells and pipelines and refineries when many of your largest customers are intending on abandoning your market in the next 10 to 15 years? Europe is requiring all new vehicles to be electric by 2035, for example. Some states like California are doing likewise.

    The transition to green energy was never going to be cheap and was always going to result in higher costs for consumers.

  17. You say those two things like they should be a contradiction. Chevron is making so much because gas is so expensive.

    Obligatory reminder that one of the largest driving forces behind inflation is companies deciding they weren’t making enough and/or want to make up for a downturn during the pandemic. Of course other factors matter too, but that’s the single most impactful driving force.

  18. Well Fox news’s heads are spinning they don’t know whether to blame it on Biden or say look how good Trump did. LOL

  19. Because capitalism doesn’t give a fuck about their consumers. The only time the system even tangentially cares is if they cannot sell their product. If it hurts the bottom line, then they care. That is it. Literally 110% of all other “caring” is virtue signaling, and that is just to help the bottom line.

    This is the best we have come up with so far. No other system implemented has generated better outcomes for all parties involved.

    We can do better I am sure, but for now this is the best we got.

  20. >**how is that even legal?**

    When you are allowed to buy the politicians & judges, everything you want to do magically becomes legal. Case in point, the buying of politicians used to be called bribery and it was illegal. Now many types of bribery are now called “Lobbying” and “Political Donations”. The lawmakers, the politicians & judges receiving the bribes, wrote & upheld laws that made certain types of bribery legal.

    One of the stipulations of this legal bribery was that it had to be out in the open and the public would see who was paying the bribe to make it look less like bribery. After Americans got used to the idea of open bribery using the euphemisms of “Lobbying” & “Political Donations”, the wealthy & corporations wanted to also be allowed to bribe politicians & judges in secret. So they told the politicians & judges that they owned that they wanted “Dark Money” to be legal. Poof! Like magic, it became reality. Now they can bribe in the open, or in secret. A company can tell their employees & customers that they stand for one thing while secretly funding the opposite or hide proof of a “Quid pro Quo”.

    ​

    Nothing will change until we get all private money out of politics.

  21. You aren’t really getting reasonable answers here, so I will try. Oil prices are set on a global market, it fluctuates up and down based on supply and demand and while that sets a global price there are also local factors like how much is stored close to you and how easy it is to get from that storage to your house and such.

    You can see the fluctuations here: https://www.macrotrends.net/1369/crude-oil-price-history-chart Notably, during the start of the pandemic, the price went way down- because no one was driving. Then around the start of the Ukraine war last year, it shot up, because people were afraid about supply and Russia cutting off its production. You can see gasoline prices more or less following the same pattern- this graph goes out a lot farther in the past- 30 years vs 10 years, there was no option to only show the last 10: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=w.

    So companies will sell based on what people are willing to pay. And also note that in many cases the price is locked in from a “wholesale” perspective in advance via futures contracts. People trade oil like stocks on commodities exchanges, and this is really what sets the price of oil, though the gyrations are driven by supply and demand surges. When the price gets too low, OPEC will often call a meeting and say “hey lets all dial our production back to get prices back higher” and for the most, the members (which are major oil producing countries, like Saudi Arabia) mostly comply, though there is often some “cheating” involved as poorer countries want to keep pumping because they need the money.

    So to bring it all back, oil and gas prices are mostly set globally, and Chevron and other companies have a fixed price that it costs them to pull it out of the ground, and any price above that is just profit. When prices drop, certain fields/production sites of oil and especially natural gas can become unprofitable to operate, and they can shut down those sites, but in some cases, thats not really possible- oil and gas wells can’t typically just be turned on and off like a light switch and you still have a massive amount of fixed investment already there that has debt and interest payments associated with it. Natural gas (which is not what you buy at a gas pump) deals with this a lot more as some of the shale fields are a lot more expensive than others to pump stuff out of because of the specific geological location and such. Companies like Chevron aren’t really complaining though when prices are “irrationally” high though. Theoretically over time the prices should attenuate because when prices go very high, it makes it economic sense to bring online more expensive sources like tar sands, but these are all huge projects that generally require hundreds of millions in investment and a lot of time to bring online- on the order of months to years, they can’t be set up in time to really react to specific market gyrations.

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