Biden Scolds Oil Producers on Buybacks as Ukraine Conflict Rages

(Bloomberg) — President Joe Biden mentioned US oil producers shouldn’t be returning report earnings to shareholders by way of larger inventory buybacks and dividends whereas Russia wages struggle in Ukraine, stepping up his administration’s criticism of the vitality trade and its position in excessive gasoline costs.

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“My message to the American vitality corporations is that this: You shouldn’t be utilizing your earnings to purchase again inventory or for dividends,” Biden mentioned Wednesday on the White Home. “Not now, not whereas a struggle is raging.”

The windfall ought to as a substitute be utilized by oil corporations to spice up manufacturing, to assist carry down gas costs for customers, he mentioned in remarks. Gasoline costs haven’t declined just lately as rapidly as crude oil costs, he added, repeating a line he has beforehand used to assault the trade.

“Carry down the worth you cost of the pump to replicate what you pay for the product,” he mentioned. “You continue to make a big revenue, your shareholders will nonetheless do very properly.”

Oil corporations, and their report earnings, have been a frequent goal for Biden amid excessive fuel costs forward of the midterm elections subsequent month that can decide if Democrats preserve management of the Home and Senate. In June, as an example, he criticized Exxon Mobil Corp. for making “more cash than God.”

Exxon, the biggest US vitality firm, posted web revenue of $17.9 billion within the second quarter after oil and pure fuel costs surged following the struggle in Ukraine. Oil and has corporations have posted the largest features on the S&P 500 Index this yr.

However regardless of gushing money, most US oil corporations are retaining a lid on manufacturing and have to date resisted Biden’s requires larger home output. Lots of their traders have demanded larger returns, and that the businesses keep away from a repeat of earlier boom-and-bust cycles the place they added a lot further provide that they created a glut.

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Biden famous Wednesday that six of the biggest publicly traded oil corporations made earnings within the second quarter of this yr that totaled $70 billion. Those self same corporations, Biden mentioned, spent $20 billion on buying their inventory, “probably the most vital inventory buyback in nearly a decade.”

The president additionally repeated calls for that oil corporations decrease the price of gas on the similar tempo as oil costs have decreased. The costs of gasoline and crude oil have declined from peaks seen within the early summer time, although each have seen features this month, with OPEC+ dialing up strain with a shock manufacturing minimize.

(Provides background on Biden’s earlier criticism of the oil trade in fifth paragraph)

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