So I don’t want to get into the weeds here, and probably couldn’t really understand it all even if I did, but it occurred to me to run a gut check on the “excess” profits the oil producers are enjoying these days. Now these vast, sprawling enterprises have tens of thousands of moving parts: exploration, refining, transport, alternative fuels, foreign government appropriations, and more, but I’m going to ignore ALL of that in favor of this simple metric:
How much oil did Exxon produce last quarter, and how much was their profit?
Exxon said its oil-equivalent production stood at 3.7 million barrels per day in the second quarter, a 4% increase from the first quarter.
3.7 million “equivalent” (whatever that means) barrels per day x 91 days = 336,700,000 bbls.
Each barrel produces about 20 gallons of gasoline, (about 50% of each barrel produces other stuff like diesel, kerosene, jet fuel, plastics, asphalt, lubricants, etc.)
So if I take 336,700,000 bbls x 20 gal = 6,734,000,000 gallons.
Now. Exxon profit for the quarter was 17.9B, or longhand $17,900,000,000. Dividing profit into gallons I get $2.66 per gallon profit . Can that be right? I feel like I must have slipped a decimal someplace or something.
I know, I know, I’m not bothering with how much they spent on hydrogen research and writing off Russia and blah blah blah. Too much info, but is it possible that Exxon makes over $2/gallon at the moment?