Chevron Stock (NYSE:CVX)
Chevron (NYSE:CVX) CEO Mike Wirth told Bloomberg on Wednesday that the oil industry’s record profits shouldn’t be seen in isolation since three years ago, it was losing billions of dollars in response to President Biden’s accusation that Enormous Oil’s big profits are being generated on the back of the conflict in Ukraine while exploiting U.S. consumers.
“Through the cycle, it’s an industry that earns 10%-ish returns on capital employed,” Wirth said during an appearance on The David Rubenstein Show: Peer-to-Peer Conversations on Bloomberg. “I believe, by the standards of many other businesses, a relatively small return,” Wirth added.
Last year, Vice President Biden criticized oil firms for profiting off the “windfall of war” as gasoline prices skyrocketed. Wirth replied, “we’re an industry of price takers, not price creators.” Wirth was referring to the oil and gas business. These are worldwide marketplaces for commodities, where prices may rise and fall anytime. Only two years ago, we suffered losses in the billions of dollars due to the falling pricing.”
According to Wirth, the possibility of a tax on windfall gains “is not going to promote additional supply, [and] is not likely to cut prices.” “It is common practice to raise taxes on a product or service to reduce demand for that good or service. Putting taxes on energy production is probably not the best solution if we want there to be more energy production and if we want there to be more supply to drive down costs.”
“The chief executive officer said, “We need to have a balanced approach to energy, and that means we need to concentrate on affordability since inexpensive energy is extremely crucial for economic growth.” dependable supply for the sake of national security since there is a correlation between energy security and national security. And last, the defense of the natural world.”
Chevron stock increased by 53% last year, while the S&P 500 index fell by 19%; the company is now on track to generate a profit of $37 billion for 2022.
Featured Image: Unsplash @ Luis Ramirez