U.S. oil producers profiting from sky-high prices are doling out billions to shareholders and building cash reserves, a strategy irking lawmakers and voters struggling with record fuel prices while winning over Wall Street.
Soaring fuel prices have boosted inflation to a 40-year record and are expected to drive up U.S. gasoline by more than a dollar to $6 a gallon by August. That prospect has some officials arguing the industry's focus on returns is benefiting a few at the expense of consumers.
Earnings from major U.S. shale, which accounts for two-thirds of U.S. oil output, could hit $90 billion this year, up from $37 billion in 2021, according to consultancy BTU Analytics, a FactSet Company. Its estimate covers only 32 publicly traded oil and gas producers.
Executives are facing calls in Washington for windfall levies, which could cut into energy profits. A group of more than 30 lawmakers recently urged a Congressional vote on a new oil tax.
U.S. President Joe Biden on Friday slammed oil companies, saying they are intentionally holding off drilling more to pump up oil and share prices. "They're buying back their own stock, which should be taxed, quite frankly," Biden said.