By Alice Seeley
Exxon Mobil Corp announced on April 4 that its first-quarter production results could be a record high since 2008, with an increase between $1.9 billion and $2.7 billion over last quarter’s $6.6 billion. U.S. oil prices increased by one-third during that time frame. Exxon’s official results will be released on Friday, April 29.
Exxon does not hedge or lock-in oil sales, unlike other fuel companies. The company’s results are due to changes in energy prices. The price of oil recently by 45% last quarter after Russia’s invasion of Ukraine sent the market into chaos. International crude futures reached a 14-year high of $140 a barrel during the quarter.
Although Exxon made a major profit this quarter, the company could take a $4 billion loss on a drilling project in Russia. Last month, Exxon stated its commitment to stopping business in Russia. Exxon’s Chief Executive Officer, Darren Woods, described Russia’s invasion as “needless destruction.” Exxon is currently “proceeding with efforts to discontinue operations” at the Sakhalin-1 drilling project.
With the national average price of gas at $4.18 a gallon, Americans are struggling to afford gas. Many consumers in Southern California and Texas have turned to Mexico, which provides government subsidies for gasoline purchases. Gas in Mexico is at least $2 less per gallon than in Southern California. However, the Mexican government announced it would end the subsidies because of the influx.
The rush on Mexican gas caused a gasoline shortage “from an imbalance between supply and demand,” according to Mexico’s finance ministry. The subsidy will no longer apply in the U.S. border region, the Mexican government announced earlier this week. This region includes the border states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora, and Baja California, including Tijuana, which is one of the world’s busiest border crossings.
