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October 30, 2021

Oil companies are getting harder to dislike. U.S. fossil fuel giants Exxon Mobil (XOM.N) and Chevron (CVX.N) have been unwavering about their commitment to drilling for black gold: As long as people are buying, they’re selling. With oil prices above $80 a barrel, the companies’ respective chiefs Darren Woods and Mike Wirth aren’t in a bad place.

On Friday the $272 billion Exxon said that revenue jumped 60% in the three quarters ended in September compared with the same period last year, to $74 billion. Chevron’s sales rose 83% over the same period. Production and capital expenditures didn’t waver much at either company. Exxon said in prepared remarks that if commodity prices stay where they are, it expects earnings to double from 2019 levels by 2025.

A swerve from European giants away from dirtier kinds of fuel has helped prices. Royal Dutch Shell (RDSa.L) and BP (BP.L) are selling some fossil-fuel businesses. But the use of oil and gas, after being hit by the pandemic, has come roaring back just as the market became starved for investment.

The number of rigs dropped by 40% since the end of 2019, according to Baker Hughes. Shell is now battling activist investor Dan Loeb, who wants it to split after making huge commitments to spending on renewable power.

Woods and Wirth have stayed firm in their strategies over the past 18 months. Though Exxon instated new directors on its board that are focused on climate initiatives, they’ve forged ahead with discoveries in long-dated offshore drilling locations like Guyana. Last year, Chevron scooped up Noble Energy when the price of Brent crude was about half what it sells for today.

The gap between investment in fossil fuels and renewable energy is narrowing as capital expenditures in oil and gas fall, according to Rystad Energy. Meantime Exxon’s forward price-to-earnings ratio of 12 is a fifth lower than at the start of the pandemic. It leaves the two U.S.-based drillers, and select giants elsewhere like Saudi Aramco (2222.SE), in a mini-sweet spot. It also challenges the idea – at least for now – that green investment needn’t be an act of altruism.