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  Bumper year
for industry majors
Bolstered by the sharp increase in oil and gas, oil majors made a comeback in 2021 from the lows in 2020 when the pandemic induced lockdowns triggered a collapse in crude prices.
“Oil companies benefitted from an extraordinary alignment of the planets,” Mr Moez Ajmi, oil industry expert at EY consultancy, told the AFP. Apart from higher energy prices, companies were in a better position to ride the price rise having earlier “cleaned up” their assets retaining only the most profitable.
Aramco’s net income surged 124% year- on-year to US$110 billion in 2021 on higher
crude oil prices, stronger refining and chemicals margins, while Shell celebrated a ‘momentous year’ with adjusted earnings of US$19.3 billion, from US$4.8 billion in 2020, boosted by significantly higher profits in trading of liquefied natural gas (LNG).
ExxonMobil, Chevron and BP rebounded from losses in 2020 to post their highest profit in years. ExxonMobil reported earnings of US$23 billion in 2021, a reversal from the US$22.4 billion loss in 2020, Chevron made a net income of US$15.6 billion, following a loss of US$5.5 billion in 2020, and BP posted underlying replacement cost profit, used as a proxy for net profit, of US$12.8 billion for 2021, against a net loss of US$5.7 billion the previous year. For ExxonMobil and Chevron, they were the best results since 2014, and for BP, since 2013.
Energy prices will stay high notwithstanding
economic uncertainties
Oil and gas prices are expected to remain high in spite of the many uncertainties weighing on the global economy. International agencies have cut the global growth forecast downwards as the year progresses as the fallout from Russia’s invasion of Ukraine reverberates across the world. Both the warring parties are key suppliers of fossil fuels, food grains, metals and fertilisers.
In its June 2022 Global Economic Prospects report, the World Bank revised its growth forecast downwards. It expects global growth to ease from 5.7% in 2021 to 2.9% in 2022 - significantly lower than 4.1% it anticipated in January. Growth in 2023-2024 is expected to hover around 2022 levels while inflation remains above target in most economies.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank President David Malpass.
But oil and gas prices will stay high on supply concerns. Europe has historically relied on Russia for over a quarter of oil supplies and around 40% of its natural gas, most of which is delivered through pipelines, and countries are scrambling for alternative supplies after they curtailed Russian imports.
Demand, however, has remained firm fuelled by record breaking temperatures across the northern hemisphere, though a recession may undercut demand. In its July outlook, the

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