IRVING, Texas – Helped by $90- and $100-a-barrel oil, ExxonMobil announced Friday that earnings increased to a record $40.6 billion in 2007. That’s $4.6 million an hour, roughly the gross domestic product of Costa Rica and Uruguay combined.
Unlike recent years, there was no immediate outcry from consumer groups and critics in Congress over Big Oil’s profits.
One exception was Rep. Ed Markey, D-Mass., who said in an e-mail statement quoted by Bloomberg News: “While the oil companies are turning the American consumer upside down at the pump, shaking out every last cent, the White House is defending unnecessary giveaways and tax breaks to big oil.”
The subprime mortgage crisis has monopolized attention, said Dan Short, dean of Texas Christian University’s Neeley School of Business, explaining the paucity of angry backlash. “Being the biggest, they have long been the poster child or lightning rod for any issue that comes up,” Short said.
The annual results, which beat financial analysts’ collective prediction, gave little indication of how the average motorist will fare at the pump this year. Company spokesman Alan Jeffers stressed that ExxonMobil, which handles about 3 percent of hydrocarbons burned in the world, doesn’t set oil prices.
All of the attention on the amount that Exxon-Mobil earns is misplaced, Jeffers said, decrying the translation of it into dollars per hour or minute. Putting it into perspective, he said, it amounted to about 10 cents on every dollar of revenue.
Oil expert Amy Myers Jaffe said that, barring a recession, oil companies will continue to collect eye-popping profits for the foreseeable future. And if they do, oil companies should brace themselves for a legislative assault from angry politicians.
“The bigger the profits, the higher likelihood that there’ll be a windfall profits tax if the composition of the Congress changes,” said Jaffe, of Rice University’s James A. Baker III Institute for Public Policy in Houston. “They’re an easy mark, and they need to consider that in their strategy.”
The announcement of record profits came on the same day the Organization of Petroleum Exporting Countries was meeting in Vienna, Austria. The 13-member group, which produces about 40 percent of the world’s petroleum, decided to leave its output unchanged despite crude oil prices that continue to hover around $90 a barrel, about 35 percent higher than they were a year ago.
The prospect of stable oil prices at current levels will translate into continued big profits for the major international oil companies.