10 Charts of the Year — Oil Profits vs. Oil Prices

Today’s (final) Chart of the Year is from the Center for American Progress, and it shows the relationship between oil prices, gasoline prices, and oil company profits.

Source: Center for American Progress via The Atlantic

What does this chart mean?

Big oil companies make larger profits when oil and gasoline prices are high.  These revenues come from the pockets of everyday Americans.  The five biggest oil companies – BP, Chevron, ConocoPhillips, ExxonMobil and Shell – have already made $100 billion in profits during the first three quarters of 2011 due to high oil prices. Yet they and other big oil companies have fought tooth and nail this year to retain tax breaks worth $4 billion annually. — Daniel J. Weiss, senior fellow, Center for American Progress


9 Responses to “10 Charts of the Year — Oil Profits vs. Oil Prices”

  1. If you find that the cost of a product is too much to bear, I have a suggestion. Don’t buy it! Get an electric car. We always hear this whining from the left about ‘BIG OIL”. As you can clearly see from the chart, oil companies do well, when the economy is good. They are always going to make money off of the products they sell. It’s called capitalism. And who is it that get’s the most revenue from a gallon of gas? Is it perhaps, government?!?!? Why isn’t “BIG GOVERNMENT” to blame for taking too much of our hard earned energy dollars?

    And remember, oil comanies make money from far more than just gasoline and diesel fuel. If you despise oil companies so much, hy not stop buying anything with plastic in it? Or make-up? Or any of the other millions of products that come from oil?

    If you really want to see oil prices come down, rather than gas prices, (or you can accomplish both), remove the drilling moratoriums, and oil and gas pricess will drop immediately. Removing the subsidies isn’t going to reduce the price of oil. Raising taxes on oil companies isn’t going to reduce the price of oil. Sometimes I wonder if anyone on left as ever taken an economics class in their lives?

    • Here’s a stat you don’t hear very often: U.S. Domestic Oil Production was 10.6% higher in 2010 than it was in 2008 (and 2008 production was 14.7% less than 2001). So far, 2011 production is about 3% higher than last year. So the notion that the Obama Administration is anti-drilling is patently false.


      Incidentally, no one is suggesting that removing tax subsidies for oil companies is going to lower the price of oil. It’s that in an era of budget-busting debt, these companies don’t require government subsidization. And, I am not advocating raising taxes in other ways on oil companies.

      • The problem with your logic is that you assert that the oil companies are getting some sort of special break. The oil companies really do not get any subsidies from the federal government. They do however, get the same tax breaks that all companies get, and that’s where this mythical 4 billion dollars comes into play. There is one exception where oil companies get a tax break that other companies do not get. For most companies, initial expenses are carried across the useful life of the venture. For example, I by a new server for my IT group, and the cost of that as an expense is carried over the 5 or X years before it becomes obsolete. Oil companies are allowed to record all expenses for a drilling operation in the year that it occurred. That is their only special tax break, which if you think about would eventually have the same effect if it were suddenly spread over time. Eventually, this expense would come off the books, whether this year or spread over 5 or even 50 years. And it is also a break designed to help smaller oil companies recover losses on failed drilling events. Do you think Exxon would struggle with these costs spread over time? Perhaps initially there would be a drag on profit, which of course would be passed on to us as product costs always are. So what’s the point?
        Can you really name an actual “subsidy” that the oil companies actually receive? Have you ever looked into how much tax the government receives from “BIG OIL”?
        And while our production maybe up, if you want the price of oil to fall, you have to provide speculators with good news. Lifting drilling bans will show the speculators that we are serious about our energy independence, and will also help us lower our trade deficit, which again is another boon to the economy.

      • You claimed 4 billion above, and then provide a link to some absurd document that claims ten times that much. Here’s an explanation of the 4 billion in tax breaks, with the exception of the one I told you about, all are available to every company, not just “big oil”.

        • The dollar figures in the document referenced in the previous post are over multiple years. It also includes ethanol subsidies. The $4B figure refers to those subsidies which were trying to be ended by Senate Democrats.

      • I believe Erik Paulsen told me last night that these ethanol subsidies have finally expired. The 4 billion that the Democrats are talking about are all available to every business with the exception I noted. Like Obamacare, the Democrats want to pick and choose which companies get a pass and which do not not.

  2. That’s a huge profit that we can’t image. Poor people like us can only let the riches manipulate our living standards. Is there a chance of changing it? I don’t think new energy can solve this problem


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