Major US oil companies posted record profits in the third quarter as international conflicts constrained global energy supplies and drove petrol prices higher for American consumers. ExxonMobil, the largest US oil producer by market capitalization, reported generating more revenue from refining operations than from exploration and drilling for the first time in at least six years. Chevron's third-quarter downstream earnings also reached their highest level over the same period. The surge in oil company profits comes as Middle Eastern disruptions from conflict and damage to Russian energy infrastructure have tightened global supply.
US consumers have borne the burden of these supply constraints through sharply elevated petrol prices throughout the year. According to AAA data, the national average price for a gallon of regular unleaded petrol was $4.20 on Friday, down from $4.43 a month earlier but substantially higher than the $3.03 average from a year ago. Diesel prices have climbed even more steeply, reaching their highest recorded average of $6.52 a gallon on September 22, according to AAA. These elevated diesel costs have rippled through the trucking industry and ultimately increased prices for groceries and other goods transported to consumers.
Government data confirms the magnitude of the price surge. The Bureau of Labor Statistics reported that petrol prices surged 9.1% on a monthly basis in September and were up 34.2% from a year ago. This volatility traces back to late February when international tensions first disrupted energy flows. BLS data showed monthly swings of 21.2% in March, 5.4% in April and 7% in May. A temporary cooling in the conflict allowed prices to decline 9.7% in June and 2.9% in July, but renewed concerns about supply disruptions led to increases of 3.9% in August and 9.1% in September.
For American savers and households, the higher petrol and diesel prices represent increased transportation and goods costs that offset gains from robust consumer spending, which is growing at 3.5% after inflation according to recent commentary.