US President Joe Biden on Friday launched a barrage of criticism at the country’s oil industry, and the Exxon Mobil Corp (XOM.N) in particular, for not pumping more crude to flatten exorbitant gas prices.
Biden accused the oil giants of using their higher profits to buy back stock instead of drilling more, as he faced reporters after addressing dockworker union representatives at the Port of Los Angeles.
“Exxon made more money than God this year", Biden said, in a reference to the massive profits the company reported in the first three months of the year.
Exxon Mobil's first-quarter profits more than doubled to $5.5 billion, and revenues rose 52.4 percent to $87.7 billion. Furthermore, the petroleum giant hiked spending on share buybacks by $20 billion.
US oil companies "have 9,000 permits to drill. They're not drilling. Why aren't they drilling? Because they make more money not producing more oil", Biden fumed on Friday.
He continued to dole out scathing criticism, saying, "they're buying back their own stock, which should be taxed quite frankly. Buying back their own stock and making no new investments".
The Democratic president, who had originally vowed to slash US dependence on fossil fuels as part of his campaign pledges, now said he was hoping to speed up oil production. US crude oil output is expected to rise by 720,000 barrels per day to reach 11.91 million bpd in 2022, the government said in a monthly forecast on 10 May 2022.
The Exxon Mobil Corporation pushed back at the president’s censure, underscoring that it had continued to increase its US oil, gasoline, and diesel production, and had borrowed heavily to increase output. Like others, the company suffered losses in the wake of the COVID-19 lockdowns of 2020 that devastated petroleum demand. But in 2021, oil companies returned to profitability and have seen earnings skyrocket this year.
"We have been in regular contact with the administration, informing them of our planned investments to increase production and expand refining capacity in the United States", spokesman Casey Norton was cited as saying.
Amid an ongoing Texas refinery expansion, Norton stated that Exxon planned to hike spending by 50% in its West Texas shale holdings. Furthermore, it anticipated adding 25% more output this year as the expansion would add the equivalent of a "new medium sized refinery", according to the spokesperson.
Runaway Inflation & Plummeting Ratings
The 46th POTUS, whose popularity has plummeted in the face of rampant inflation and over-the-top gas prices, lashed out at oil companies just hours after the government released a devastating inflation report on Friday. The Bureau of Labour Statistics said that US inflation hit a new 40-year high last month at a rate of 8.6%. This is the highest since December 1981. The Consumer Price Index (CPI), a measure of goods and services prices, surged even more than the 8.3% Dow Jones estimate.
Elsewhere in the report, it was revealed that energy prices rose 34.6%, the most since September of 2005. Oil prices have mostly remained above $100 a barrel after spiking to around $130 a barrel in early March. Food costs have also surged dramatically by 10.1%. The average price of gasoline at the pump in the United States hit more than $5 a gallon on 9 June for the first time ever, fuel price tracking service GasBuddy reported.
$100-plus per barrel oil prices have been plaguing the Biden administration, which has attempted to lower costs with a record release of barrels from US strategic reserves, as well as urging major OPEC countries to boost output.
Meanwhile, President Biden’s approval rating among Americans has hit an all-time low, according to a new Morning Consult poll published on 8 June. It revealed that 58 percent of those surveyed disapprove of Biden’s performance as president, while only 39 percent of respondents approve.
During his Friday visit to the Port of Los Angeles, Joe Biden once again blamed the economy’s woes on “Putin’s tax on both food and gas".
According to the American president, the impact of Russia’s special military operation in Ukraine is to blame for rising food and gas prices in his country and elsewhere around the world.
On 9 June, Russia’s President Vladimir Putin dismissed the claims yet again, saying with wry humour:
"They are trying to limit exports of our fertilisers — prices have gone up, first of all, on their markets more than on ours. They are trying to limit our energy resources — prices skyrocketed again. They already call inflation after me, but we have absolutely nothing to do with it… This is the result of their mistakes, and long-term ones".