New York July 15 2022: More evidence has emerged that Big Oil’s second-quarter will be dominated by blockbuster refining profits.
Shell Plc already flagged last week a potential $1 billion gain from soaring margins at the unit that processes crude into fuels and chemicals. On Friday, TotalEnergies SE said its refining business had an “exceptional” performance in the period.
The French giant said the variable cost margin for European refining — which represents the average earnings per barrel at its plants across the region — was a staggering $145.70 in the second quarter, more than three times higher than the prior period.
A shortage of refining capacity, compounded by a reduction in exports of Russian oil products since the invasion of Ukraine, have pushed road fuel prices to record levels in many countries. The trend has been good for the oil majors after several tough years, but could backfire as rampant inflation forces central banks to raise interest rates and prompts some governments to consider windfall taxes.
