Big Oil just posted another quarter of staggering profits — and instead of putting that money into American energy production, the supermajors are paying down debt and buying back stock. Less drilling, fewer pipelines, no new refineries, and higher prices at the pump for ordinary Americans.
Europe's top six oil majors alone booked $38 billion for the July-to-September quarter, according to Europe Says. Add Exxon and Chevron, and the figure swells considerably. Exxon's third-quarter profit doubled from a year ago. Chevron tripled. BP reported its highest quarterly profit in the company's history.
Normally, this is the part of the cycle where Big Oil starts spending. Analysts call it a supercycle, and supercycles drive super investments. Not this time. BP even suspended its share buyback program to cut debt faster, slashing its debt pile by $10 billion down to $13.9 billion. The industry is hoarding cash and sitting tight.
Europe Says framed the reluctance as long-term market skepticism, citing Reuters columnist Ron Bousso: "Big Oil has so far shied away from major new spending, suggesting the majors do not see today's market conditions as evidence that the industry's long-term outlook has improved." The piece leaned into debates about peak oil demand and EV adoption rates.
What Europe Says buried: the regulatory environment. You don't have to guess why oil executives won't commit billions to new projects when Washington has spent years killing pipelines, blocking leases, and tightening the screws on refineries through EPA rulemaking. Regulatory uncertainty makes new investment irrational. Why break ground on a multi-billion-dollar project when the federal government can retroactively make it uneconomic?
The interest rate environment compounds the caution. As Sainteur reported, even Apollo Global Management — one of the biggest credit originators in the country — booked a $1.1 billion GAAP loss this quarter, driven primarily by unrealized mark-to-market losses from higher interest rates in its retirement services segment. When rates swing hard enough to flip billions in investment income from gains to losses in a single quarter, capital gets defensive. Big Oil is no exception.
The industry isn't monolithic. TotalEnergies revised its peak oil demand forecast, now expecting demand to peak between 2035 and 2040 — earlier than its previous after-2040 estimate. Commodity trader Vitol goes the other direction, forecasting oil demand growth through 2040, citing slower-than-expected EV adoption.
But the bottom line for working Americans is simpler than the demand-forecast debate: the companies that pull oil and gas out of the ground are choosing financial engineering over production. Pay down debt, repurchase stock, be picky about new investments — exactly the behavior you'd expect when the people running the government have made drilling, piping, and refining harder and riskier.
The war-driven windfall won't last. When it ends, the production capacity that wasn't built won't be there. That's a bill that shows up at the pump — and Washington helped write it.
