Biden Scolds Oil Producers on Buybacks as Ukraine War Rages

(Bloomberg) — President Joe Biden said US oil producers shouldn’t be returning record profits to shareholders via higher stock buybacks and dividends while Russia wages war in Ukraine, stepping up his administration’s criticism of the energy industry and its role in high gasoline prices.

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“My message to the American energy companies is this: You should not be using your profits to buy back stock or for dividends,” Biden said Wednesday at the White House. “Not now, not while a war is raging.”

The windfall should instead be used by oil companies to boost production, to help bring down fuel prices for consumers, he said in remarks. Gasoline prices haven’t declined recently as quickly as crude oil prices, he added, repeating a line he has previously used to attack the industry.

“Bring down the price you charge of the pump to reflect what you pay for the product,” he said. “You still make a significant profit, your shareholders will still do very well.”

Oil companies, and their record profits, have been a frequent target for Biden amid high gas prices ahead of the midterm elections next month that will determine if Democrats maintain control of the House and Senate. In June, for instance, he criticized Exxon Mobil Corp. for making “more money than God.”

Exxon, the largest US energy company, posted net income of $17.9 billion in the second quarter after oil and natural gas prices surged following the war in Ukraine. Oil and has companies have posted the biggest gains on the S&P 500 Index this year.

But despite gushing cash, most US oil companies are keeping a lid on production and have thus far resisted Biden’s calls for higher domestic output. Many of their investors have demanded higher returns, and that the companies avoid a repeat of previous boom-and-bust cycles where they added so much additional supply that they created a glut.

Biden noted Wednesday that six of the largest publicly traded oil companies made profits in the second quarter of this year that totaled $70 billion. Those same companies, Biden said, spent $20 billion on purchasing their stock, “the most significant stock buyback in almost a decade.”

The president also repeated demands that oil companies lower the cost of fuel at the same pace as oil prices have decreased. The prices of gasoline and crude oil have declined from peaks seen in the early summer, though both have seen gains this month, with OPEC+ dialing up pressure with a surprise production cut.

(Adds background on Biden’s previous criticism of the oil industry in fifth paragraph)