BP and Shell vs. Exxon and Chevron: The Mystery of Big Oil’s P/E Gap

Last year, global oil companies boomed.


BP


and


Shell


both based in London, saw share prices rise some 40% in 2022 and trade at five times forward earnings. U.S.-based


Exxon Mobil


soared nearly 80% and trades at almost 10 times earnings, while


Chevron


rose 50% and trades at 11 times.

Why that gap? Many blame windfall-profit taxes. All of the oil giants feasted on rising oil prices after Russia invaded Ukraine. While prices have fallen, they’re still at levels that produce sizable profits. However, European governments are clawing back some of those gains by taxing oil producers to subsidize high energy costs for consumers.