12 Most Profitable Oil Stocks in the World
In this piece, we will take a look at the 12 most profitable oil stocks in the world. For more companies, head on over to 5 Most Profitable Oil Stocks in the World.
2022 was a year marked by tough economic conditions that were fueled by inflation. However, oil companies had a booming business, since high prices led to record revenues which then translated into record profits for the firms. To make their investors happy, the firms went on to declare impressive dividends - a move that generated controversy as critics pointed out that the oil company investors were profiting at the expense of ordinary people who had to pay record high prices for gasoline and other fuels.
What's Happening in the Oil Industry?
The Russian invasion of Ukraine also caused a shift in the global thinking for fossil fuels, as it created a vacuum for more investment into the sector due to the inability of producers to rapidly respond to a supply chain shock. Subsequently, market research firms continue to have high growth estimates for the oil industry. For instance, a report from the research firm The Business Research Company outlines that the industry was worth a stunning $6.9 trillion at the start of 2022, and ended up growing to $7.3 trillion by the end of the year with a compounded annual growth rate (CAGR) of 4.9%. This is a high growth rate for a highly mature industry, and looking at the future, the researcher believes that the sector will sit at $8.6 trillion by the end of 2027 as it will grow at a CAGR of 4.3%.
Geographically, the Business Research Company outlines that Asia Pacific is the largest oil consuming region - which is unsurprising as China alone processed 13.4 million barrels per day during the first ten months of 2022, and the Organization of the Petroleum Exporting Countries (OPEC) believes that this year Chinese oil demand will grow by 510,000 barrels per day.
Speaking of 2023, the future of crude oil prices is also causing significant debate in the industry. OPEC also believes that global demand for crude oil will grow to 101.8 million barrels per day, increasing by 2.2 million barrels. The International Energy Agency's (IEA) latest oil market report, published in January, has similar market and demand estimates, as it outlines that demand will sit at 101.7 million barrels per day and grow by 1.9 mb/d. Similarly, it also asserts that China will account for nearly half of this demand growth, but worryingly (or positively if you're an oil company) shares that supply growth will slow down to 1 million bp/d due to an 870,000 barrel drop in Russian output.
On the topic of the Ukraine invasion, IEA shares that European sanctions against Russian oil are making their mark, as Russia's oil exports fell by 200,000 barrels per day in December over November, and the country's oil revenues also dropped by a painful $3 billion monthly in December and stood at $12.6 billion with the North Sea benchmark trading at $83 per barrel after it dropped by $18 from the previous month's peak. A disruption in the oil supply chain due to Russian sanctions has also led to more oil being on the water as ships have to travel longer distances. In fact, according to the IEA, this in transit oil soared by a massive 181 million barrels as of December 2022.
Outlook
For oil prices, the outlook remains mixed. While OPEC officials, speaking to Reuters, said that prices can touch $100 this year, a survey of economists and analysts expects the per barrel price to hover around $89.7. On the other hand, investment bank Goldman Sachs holds the view that Brent crude will average at $92 per barrel this year and can reach $100 per barrel by December. These estimates are fueled by strong hope for a Chinese recovery.
With these details in mind, we decided to take a look at which oil companies are the most profitable. Out of these, the top three are Saudi Arabian Oil Company (TADAWUL:2222.SR), Exxon Mobil Corporation (NYSE:XOM), and Shell plc (NYSE:SHEL).
Pixabay/Public Domain
Our Methodology
We listed down all major oil companies in the world according to their market capitalization and revenue. After this, their trailing twelve month net income was calculated, and the top twelve companies were selected.
12 Most Profitable Oil Stocks in the World
12. Occidental Petroleum Corporation (NYSE:OXY)
Trailing Twelve Months Net Income: $12.9 billion
Number of Hedge Fund Holders In Q3 2022: 74
Occidental Petroleum Corporation (NYSE:OXY) is a diversified American oil and gas company that explores, produces, and transports petroleum products. The company is headquartered in Austin, Texas.
Occidental Petroleum Corporation (NYSE:OXY)'s chief executive officer Ms. Vicki Hollub commented in January 2023 that when it comes to her firm, returning capital to shareholders in the form of share buybacks is more important than investing for growth. She also shared that cost inflation in the Permian Oil Basin field - a crucial U.S. shale oil production area continues to drop. 74 of the 920 hedge funds polled by Insider Monkey during Q3 2022 had invested in the company.
Occidental Petroleum Corporation (NYSE:OXY)'s largest investor is Warren Buffett's Berkshire Hathaway which owns 194 million shares that are worth $11.9 billion.
11. CNOOC Limited (HKG:0883.HK)
Trailing Twelve Months Net Income: $16.05 billion
Number of Hedge Fund Holders In Q3 2022: N/A
CNOOC Limited (HKG:0883.HK) is one of the biggest oil companies in China. It is headquartered in Central Hong Kong and has production facilities in the South and East China seas and other regions such as Europe and the Middle East. The firm is also one of the biggest oil companies in the U.K. North Sea, but its efforts to sell the interest is facing delays.
CNOOC Limited (HKG:0883.HK) joins Exxon Mobil Corporation (NYSE:XOM), Saudi Arabian Oil Company (TADAWUL:2222.SR), and Shell plc (NYSE:SHEL) in our list of the world's most profitable oil firms.
10. ConocoPhillips (NYSE:COP)
Trailing Twelve Months Net Income: $18.6 billion
Number of Hedge Fund Holders In Q3 2022: 64
ConocoPhillips (NYSE:COP) is a petroleum company that produces crude oil, natural gas, and other products. The firm is based in Houston, Texas and it has assets all over the world including Europe, Asia, North America, and Australia.
ConocoPhillips (NYSE:COP) is currently in the midst of an interesting project in Alaska. For this project to work, the company will have to first freeze the permafrost that has melted in the area since its equipment depends on it. By the end of last year's third quarter, 64 of the 920 hedge funds polled by Insider Monkey had invested in the company.
Ken Fisher's Fisher Asset Management is ConocoPhillips (NYSE:COP)'s largest shareholder with a $708 million stake that comes via 6.9 million shares.
9. PetroChina Company Limited (SHE:601857.SS)
Trailing Twelve Months Net Income: $20.12 billion (1CNY = 0.15USD)
Number of Hedge Fund Holders In Q3 2022: N/A
PetroChina Company Limited (SHE:601857.SS) is a Chinese state owned oil company. Like other diversified oil firms, it is involved in several stages of the supply chain, including exploration, production, refining, and transportation. PetroChina Company Limited (SHE:601857.SS) has thousands of kilometers of pipelines and is headquartered in Beijing.
PetroChina Company Limited (SHE:601857.SS) is also one of the top three oil companies in the world when it comes to its revenue. However, it falls down on the profit ladder, highlighting the low profit margin nature of its industry.
8. Public Joint Stock Company Gazprom (MCX:GAZP.ME)
Trailing Twelve Months Net Income: $27.4 billion (1RUB = 0.014USD)
Number of Hedge Fund Holders In Q3 2022: N/A
Public Joint Stock Company Gazprom (MCX:GAZP.ME) is a Russian oil and gas company. It produces, refines, and transports petroleum products, and was at the center of controversy last year on multiple counts. One of these was its huge NordStream pipeline, which was sabotaged and stopped supplying gas to Germany. The other was sanctions by the U.S. government that were designed to cripple the Russian war machine.
7. BP p.l.c. (NYSE:BP)
Trailing Twelve Months Net Income: $28 billion
Number of Hedge Fund Holders In Q3 2022: 25
BP p.l.c. (NYSE:BP) is one of the largest oil companies in the world, and one of the firms that is often classified as a supermajor. The firm sells oil and gas, and recently, it is also pivoting towards climate friendly technologies such as carbon capture. The company is based in London, United Kingdom.
BP p.l.c. (NYSE:BP) impressed investors but made climate activists unhappy when it announced in February 2023 that it is scaling back its emissions targets by increasing production by 2030 to higher levels. Insider Monkey dug through 920 hedge fund portfolios for last year's third quarter to discover that 25 had invested in the company.
Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital is BP p.l.c. (NYSE:BP)'s largest investor. It owns 27 million shares that are worth $772 million.
6. Equinor ASA (NYSE:EQNR)
Trailing Twelve Months Net Income: $28.7 billion
Number of Hedge Fund Holders In Q3 2022: 17
Equinor ASA (NYSE:EQNR) is a Norwegian state owned oil company with refineries, electricity generation plants, terminals, and carbon capture storage projects. It is based in Stavanger, Norway.
Equinor ASA (NYSE:EQNR) won big last year as Russia's limited gas supplies to Europe enabled the company to capture an important market share. 17 of the 920 hedge funds part of Insider Monkey's Q3 2022 survey had invested in the company.
Equinor ASA (NYSE:EQNR)'s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital which owns 9.9 million shares that are worth $329 million.
Saudi Arabian Oil Company (TADAWUL:2222.SR), Equinor ASA (NYSE:EQNR), Exxon Mobil Corporation (NYSE:XOM), and Shell plc (NYSE:SHEL) are some of the most profitable oil companies in the world.
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Disclosure: None. 12 Most Profitable Oil Stocks in the World is originally published on Insider Monkey.