Thanks to the spike in oil prices that followed Russia’s invasion of Ukraine, oil major ExxonMobil made a record $55.7bn (£45.2bn) in profit last year.
More countries, like the United Kingdom, levied special taxes on the earnings last year, so this year’s total is likely to put pressure on the business.
Oil giant Exxon has argued that restrictions are unnecessary.
As a result of the EU’s new windfall tax, it filed suit against the bloc last month.
Brussels, it said, had overstepped its bounds of legitimacy.
In the United States, the White House has criticized oil companies for not doing more to raise supply, instead choosing to spend their earnings to reward investors, through share buybacks. Exxon has spoken out against similar ideas in both countries.
On Tuesday, CEO Darren Woods said the company’s success proved the wisdom of its approach, which had been criticized in recent years for failing to do more to address climate change by changing to investments in renewable energy.
When Exxon announced its first loss in decades in 2020, its stock price plummeted. The share price, however, has skyrocketed since 2021, especially when oil prices spiked due to the Ukrainian conflict disrupting energy supply the previous year.
Naturally, our performance benefited from a favorable market, but to fully take advantage of the undersupplied market, our work began years earlier,” Mr. Woods said in a conference call with investors. We went against the grain and plowed ahead when everyone else was retreating.
The company said it had been making significant efforts to cut expenses and that profits would have been considerably greater if not for the windfall taxes in Europe.
The corporation reported a $1.3 billion loss in the year’s closing months, mostly due to higher European taxes.
It also disclosed a $3.4 billion annual charge due to the expropriation of its investments in Russia.
Exxon reported a 38% increase in spending over the previous year. The corporation reported a 30% increase in overall output due to gains of over 30% in important regions including Guyana and the Permian Basin.