Western Oil Companies See Profit Boost From Russian Strikes and Sanctions

November 4 ------ Ukrainian attacks on Russian refineries and Western sanctions are helping major oil companies in the US and Europe. Profits from refining at ExxonMobil, Chevron, Shell, and Total Energies jumped 61% in the third quarter compared with the previous quarter, boosting overall profits by 20%, Reuters reported.

Drone attacks on Russian refineries and export terminals since July have cut daily petroleum product shipments by 500,000 barrels in September from this year’s peak. Russia was exporting just 2 million barrels per day – its lowest level since the start of the war and the 2020 COVID-19 pandemic, according to Kpler, a data analytics firm that tracks global oil and gas shipments. The disruptions have raised refining profits for the four Western companies, which together produce more than 10% of the world’s petroleum products, about 11 million barrels per day.

ExxonMobil said Friday its energy products unit profit rose more than 30% from the previous quarter to $1.84 billion due to global supply shortages. BP, which will report quarterly results Tuesday, is in a similar position. The company, which sold nearly 20% of its stake in Rosneft after the war began, now earns extra profits thanks to sanctions. Its refining margins rose 33% from the second quarter and remained high.

The situation is expected to continue. EU sanctions from July banning Russian petroleum products in Europe have already reduced output at Rosneft’s Indian refinery, which had shipped large volumes to Europe. European sanctions take effect in January and are expected to further raise demand for non-Russian fuel and crude. US sanctions on Rosneft and Lukoil in October have had a similar effect.

Analysts do not expect major oil price increases from Russian supply disruptions because the global market has a crude surplus. The International Energy Agency predicts a 4 million barrel-per-day surplus next year, about 4% of global demand.

Source: kyivpost.com