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Big Oil Poised For “Exceptional” Earnings Thanks To High Refining Margins

High refining margins and fuel demand in the second quarter are set to lead to exceptional earnings at Big Oil's refining businesses.

Some of the largest international oil majors have already announced expectations of blockbuster earnings from their refining divisions when they report Q2 profits later this month.   

The latest company to preview blockbuster earnings in refining was France's supermajor TotalEnergies, which said on Friday that "Refining & Chemicals results are expected to be exceptional given the very high levels of distillate and gasoline cracks."

TotalEnergies' variable cost margin across its European refining business jumped to $145.70 per ton in the second quarter, more than three times the $46.3 per ton margin for the first quarter of this year.

"Performance of the gas, LNG and power trading activities is expected to remain high, but without replicating the exceptional contribution of the first quarter of 2022," TotalEnergies added.

Shell also said last week that its indicative refining margin-an approximation of Shell's global gross refining unit margin-surged to $28.04 per barrel in the second quarter, compared to $10.23 barrel in the first quarter of 2022.

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The nearly tripled refining margin is expected to add between $800 million and $1.2 billion to the second quarter results of Shell's Products division, compared to the first quarter 2022.

On July 1, ExxonMobil said in an SEC filing that the rise in industry margins is set to add between $4.4 billion and $4.6 billion to its Q2 results. The change in the value of unsettled derivatives would add another up to $900 million to Exxon's earnings for the second quarter.  

So, Big Oil will be reporting in the last week of July another quarter of blockbuster earnings, this time aided by record refining margins as refining capacity globally is constrained, crude prices rallied in Q2, and fuel demand rebounded strongly.

Record refining margins and high earnings at the biggest oil corporations have been under continuous criticism by President Joe Biden and his Administration who have been warning firms against "profiteering" while gasoline prices hit records last month.

By Tsvetana Paraskova for

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Tsvetana Paraskova

Tsvetana is a writer for with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.  More


  • Ian St. John - 15th Jul 2022 at 7:34pm:
    Oil has a long history of limiting refinery capacity to extract the maximum "margins' whenever the demand goes up or supply is restricted. It is called 'semi-monopolistic'. And all the 'investigations' into this 'profiteering' end up pointing to supply and demand. Of course. That is what they are USING to increase profits by restricting supply.

    Yes, they are gouging but that is a long term thing. The only recourse is to break up the corporations (increasing competition) or switching to alternatives to force them to be more competitive. Biden won't be able to do much.
  • George Doolittle - 15th Jul 2022 at 12:47pm:
    The only reason for these massive revenue and profit statements is a sound electrical grid that keeps the US pipeline network safe and functioning properly both for natural gas ("the input") and refined products ("the output.") Yes "alternatives" such as wind and solar have made a difference but in the end this money machine has only been made possible by the stability offered up using coal and nuclear power which can be mitigated by massive outputs from natural gas "peaking units" lately supplemented by both IBM and now Tesla in adding further grid stability.
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