The energy crisis sparked public outrage, but it also paved the way for a historic payoff. The five largest oil companies are expected to break all records by distributing more than $100 billion to investors in 2023.
According to the Institute for Energy Economics and Financial Analysis (IEEFA), the five supermajors–British Petroleum, Shell, Chevron, ExxonMobil, and TotalEnergies–showered shareholders with dividend payments and share buybacks totaling $104 billion in the fiscal year 2022.
According to the Guardian, the large payouts followed a year of record profits for major oil and gas companies after Russia’s invasion of Ukraine upended global energy markets, causing the international price of Brent crude to rise and European gas prices to reach new highs.
Despite lower profits due to lower commodity market prices, financial analysts at IEEFA believe the companies will pay even higher shareholder distributions this year. The payouts will also come after a year that is expected to be the hottest on record, with the climate emergency causing a slew of extreme weather events.
“At the current pace of distributions via share buybacks and dividends, these five super-majors could set a record for distributions to shareholders in 2023, topping the $104 billion spent during the 2022 calendar year,” Trey Cowan, an analyst at the IEEFA, said.
The decision to reward shareholders with record payouts during a time of hardship for many may exacerbate public resentment of oil companies, leading to increased regulation. While these dividends may benefit shareholders, they are unlikely to have a significant impact on oil prices, which are primarily determined by global market forces.