After spending several weeks in Dallas helping to welcome our first granddaughter, Abby Mei, to this small world, we returned to Houston last weekend. We found ourselves having to readjust to our normal routine, already missing her.
On 13 August, AAPG is pleased to invite the head of the Statistical Review of World Energy, Selene Law, from the Energy Institute to share highlights from the 2026 Statistical Review of World Energy. You can register to attend the event here.
This week, I've taken a look at how majors are paying down debt with high Q2 profits. I've also written a special report on recent developments in Cyprus, which you can read on AAPG's website and below.
ENI and TotalEnergies Take FID on the Cyprus Gas Field by Sending Gas to an Egyptian LNG Plant. Cyprus is on its way to becoming the latest gas-producing country.
Major international oil companies made higher profits in Q2 due to higher oil prices. Some majors achieved these higher numbers even with lower production. Many majors have used the extra income to pay down debts—rather than buying back more shares—to strengthen their balance sheets.
Debt details: Here is a closer look at the debts that various majors have paid down.
$3.1 billion for BP, plus $1.1 billion for oil spill payables in the Gulf of Mexico (America), with $5.9 billion remaining
ExxonMobil achieved strong financial results despite a 10 percent decrease in production, especially from its Middle Eastern business, due to the Iran War.
IOCs Q2 profits:
According to Bloomberg, the five majors—ExxonMobil, Chevron, Shell, TotalEnergies, and BP—made collective earnings of $46 billion, the highest since Q2 ($59 billion) and Q3 ($57 billion) of 2022, following the Russian invasion of Ukraine.
ExxonMobil: $14.5 billion, its highest since 2022, after another price hike following Russia’s invasion of Ukraine.
Chevron: $12.1 billion, five times that of Q2 2025
Shell: $9.8 billion, gearing down to 19 percent (from 23 percent)
BP: $5.7 billion, up $2.5 billion from Q1
TotalEnergies Q2 net income is $6 billion, up 12 percent from Q1
Higher refining margins also contributed to the record Q2 results, according to the WSJ.
Loss of significant refinery capacity—partly due to the closure of the Strait of Hormuz, the outages at Russian refineries, and the Chinese ban on oil product exports—has led to higher refining margins.
Continuous operational improvements and lower costs also contributed to Q2 results.
IOCs face public pressure with high profits.
During periods with higher oil prices, IOCs are often under political pressure, as they are viewed as having benefited from war.
President Trump expressed his displeasure with oil companies, telling reporters, “I don’t like it.” He said that ExxonMobil and Chevron are “making too much money” and urged them to “give some of that back to the public” by cutting retail gasoline prices, according to Bloomberg.
In June, President Trump ordered the U.S. Department of Justice to investigate whether oil companies have been price gouging.
In the United Kingdom, the government introduced a 38 percent Energy Profits Levy in 2022 as a windfall tax on energy companies after oil and gas price hikes following Russia’s invasion of Ukraine.
This time, there has not been pressure to introduce more windfall taxes.
New Prime Minister Andy Burnham opted to maintain the U.K. government’s ban on new North Sea exploration, despite industry appeals to lift the ban.
IOCs argue that they are not the oil price makers, and oil price fluctuations are part of the oil business. No one would come to their rescue when oil prices are low.
Darren Woods, Chairman and CEO of ExxonMobil, said that some people “are very good at shifting blame” to the oil industry.
What to watch:
If the Iran War ends soon and the Strait of Hormuz reopens, oil prices will likely drop significantly.
Earnings levels for Q3 and Q4 might not be as high as Q2 for majors.
Will public sentiment against high profits from IOCs lead to policy changes?
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