American oil companies prefer to use profits to pay off debt and reward shareholders

Rising energy prices have given new impetus to voices calling for the United States to increase its oil and gas production, but companies have recently shown reluctance to pump much larger quantities.
After oil prices fell at the beginning of the Covid-19 epidemic, they gradually rose in the past months, until they finally crossed the threshold of $100 a barrel for the first time since 2014, in light of the escalation of the situation, leading to the Russian military attack on Ukraine.
However, the oil companies, whether major such as ExxonMobil and Chevron or smaller ones, were keen not to take advantage of the return to record profits in order to increase their production at any cost, according to “French”.
Investors clearly stated that they preferred to use profits to pay off debt or reward shareholders, while some called on major groups to spend more on other energies.
What fuels the reservations of giant sector groups, the sharp drop in crude prices at the beginning of 2020, and the uncertainty that still surrounds the course of the epidemic and its repercussions on energy demand.
But with energy prices finally recovering, the American Petroleum Institute, the largest association of US energy producers, said President Joe Biden must change direction.
The union called in Biden’s tweet to authorize more energy extraction projects on federal lands and at sea, expedite the procedures for issuing permits and cancel administrative transactions.
“At a time when the crisis in Ukraine is escalating, US energy leadership is more important than ever,” the union wrote on Twitter.
Republicans in Congress also raised their voices to express their opposition to the White House’s energy policy in light of the current situation in Ukraine.
Among the most prominent measures that Biden has taken in this context is the abolition of the “Keystone XL” oil pipeline and the imposition of restrictions on energy projects on federal lands.
Senator from Louisiana Bill Cassidy called on the United States to flood the world with energy in order to eliminate the oil-revenue-financed Russian war machine.
The analyst at the “Third Bridge” Investments that the companies in the sector will not suddenly change their strategies.
He explained, “He called on everyone not to pump huge amounts, whether shareholders or investors who are keen on social problems or President Joe Biden.”
And oil prices have previously exceeded $100 a barrel, and every time they have come back and fallen suddenly.
And the Westerners took into account in their response to the invasion of Ukraine by placing Russia in the field of energy as the third producer of crude in the world and the supplier of Europe with 40 percent of its gas imports.
In this context, Washington was keen, in the new set of sanctions, which it imposed on Moscow on Thursday, not to exclude it from the SWIFT global system of interbank transfers, which allows the transfer of funds to pay for oil imports.
“It is unlikely that a large-scale military conflict between Russia and the West will occur, but a large-scale economic war is almost inevitable,” Jarand Reichstad, head of the Reistad Energy office, wrote in a note, noting that Russia could use its energy exports as a weapon.
US oil producers have refrained, at least until recently, from increasing their investments in new projects.
For its part, Devon Energy announced last week that it is not scheduled to increase its investment spending in 2022 even if profits recorded a significant increase.
When Chevron Group’s annual results were published at the end of January, its chairman Mike Wirth pledged “discipline” on investments, stressing that the company’s long-term outlook for oil prices “has not changed much”.