This is an unpleasant cartoon and misleading as well. Multinational oil companies’ profits are driven by the crude oil price and that is determined by supply and demand. It’s a free market and there are many suppliers/producers. Russia is a major player but she did not choose to restrict exports, that was western sanctions. Sanctions reduced supply and as a consequence spot prices rose.
Prices peaked a year ago as sanctions were applied but have fallen back in recent months though they are still well above the levels of three years ago. Russian exports, especially at a discount to China and India, are back to pre war levels but their revenues per barrel are lower as these are to some extent distress sales. Nevertheless Russia’s war in Ukraine is substantially being funded by oil sales, though not to the West.
However big a multinational oil company is it does not determine the price it receives from its customers except on the margin. All supply contracts have a market price link in them – broadly if supply goes up prices fall and if it is constrained they increase.
Oil companies are the wrong target, there is little they can do about the price of crude oil or refined products. And around 53% of current pump prices that the motorist pays go to the Government in Duty and VAT. Only 34% is Wholesale – i.e. Crude price influenced by supply and demand.
Companies like Shell and BP are woefully bad at explaining the realities of the oil economics I’ve summarised here.
One thought on “Multinational Oil Companies profits are largely determined by factors beyond their control”
Perhaps you should return to work Paddy and follow the trend. Shell needs you it seems.
On a more serious note, I often wonder quite who the capitalist system exists and functions for. Presumably in a democracy, the people believe the system they vote in and tolerate operates in their favour. Otherwise, logically they might decide on an alternative.
It is becoming increasingly obvious that capitalism exists in our societies only for a small percentage of already ridiculously rich groups
In France, we are currently witnessing a pushback against dominant capitalism. It’s been happening for some time now. This movement of diverse anti-capitalist groups will not just fade away.
Unless capitalists and shareholders realise that the wealth they suck out of society is not ploughed back in to directly benefit the underclass, the less well-off, civil unrest will perpetuate. Not just through their own enterprises rewarding shareholders but by serious taxation. Wealth fund managers who own and benefit from this excess profit hardly have any social conscience. That would be too much to expect.
It is the role of democratic governments around the world to regulate and meaningfully tax excess. They have a moral responsibility so to do and if not suffer the consequence.