Oil giants' profits decline 16% in 2024

ANKARA

The combined profits of eight of the world's largest oil companies fell 16% in 2024 compared to the previous year, bringing total earnings down to $217.65 billion.

Among the global oil majors reporting declines were US-based ExxonMobil and Chevron, the UK's bp, France's TotalEnergies, Italy's Eni, Norway's Equinor, Dutch-based Shell, and Saudi Aramco, the kingdom's state-owned oil giant.

Saudi Aramco posted a 12.4% drop in annual earnings, reporting a profit of $106.20 billion, while ExxonMobil recorded a 6.5% decline, bringing its full-year profit to $33.68 billion.

Shell's profits fell 16% to $23.72 billion, while Chevron posted a steeper 17.4% drop to $17.66 billion. TotalEnergies saw an even larger decline of 26.3%, reporting $15.76 billion in profit.

bp recorded a sharp drop with earnings plunging 35.6% to $8.91 billion. Equinor's profit fell 25.8% to $8.83 billion, while Eni reported the most significant decline, with a 44.5% slump to $2.89 billion.

Meanwhile, Russia's Rosneft has yet to disclose full-year profit results. The company's revenue for the January-September period of 2024 fell 13.8% to $8.72 billion, down from $10.12 billion in the same period of 2023.

In total, the companies' combined net profits dropped from approximately $259.2 billion in 2023 to $217.65 billion last year.

- Profits likely to decline further in 2025

Jorge Leon, senior vice president at Norway-based consultancy Rystad Energy, identified two key drivers behind the profit downturn in 2024.

Oil prices declined in 2024 compared to 2023, particularly in the second half of the year, Leon told Anadolu.

"In 2023, Brent crude averaged $83 per barrel, while in 2024 it fell below $80 per barrel, directly impacting revenues," he said.

He also pointed to weaker refining margins, which squeezed profits from processed oil products.

"For 2025, we expect oil prices to average below 2024 levels—around $75 per barrel—so I would not be surprised if oil giants' revenues this year are even lower than last year," he added.

- Oil prices could reach $75 but remain capped

Homayoun Falakshahi, a senior oil analyst at Kpler, attributed the recent price weakness to high production levels and tepid demand.

However, he noted that OPEC+ supply management efforts have been effective in stabilizing prices.

Falakshahi also highlighted geopolitical risks, particularly US sanctions on Iran.

The US recently sanctioned a Chinese company that purchased Iranian crude which is likely to trigger panic among other buyers, leading them to scale back their purchases from Iran, he said.

"As a result, Iranian oil could become stranded in the medium term, forcing the National Iranian Oil Company (NIOC) to cut production," he explained.

Seasonal demand increases over the summer could push oil prices back toward $75 per barrel in the next two to three months, Falakshahi noted. However, he expects prices to retreat later in the year.

"In the longer term, by the end of Q3 and Q4, prices are expected to return to current levels or dip slightly below $70 per barrel, primarily due to persistently weak fundamentals," he concluded.