In this piece, we will take a look at the eleven most profitable energy stocks. For more stocks, head on over to 5 Most Profitable Energy Stocks.
The energy industry is one of the most lucrative sectors in the world due to the immense requirements of modern day civilization. Every day countless airplanes, cars, and power plants consume millions of barrels of fossil fuel to ensure that the global economy keeps on functioning despite the furor raised by climate change activists.
Additionally, despite the recent shift towards renewable energy, fossil fuels continue to power most of the world's cars and homes, and their importance only increased in the aftermath of the Russian invasion of Ukraine which shifted the need for Western countries to source their oil and gas from non Russian sources. As we enter 2023, not only is the market continuously making bets on where oil prices will be at the end of this year, but oil companies are posting record revenues and profits after spending a year in a high price environment.
The latest take on the oil price comes courtesy of the investment bank Morgan Stanley. In a fresh note released in February 2023, the bank increased its price forecast by a whopping 36% as it speculated that a recovery in global air travel and China's reopening will stimulate the oil economy. Morgan Stanley now believes that global oil consumption will grow by 1.9 million barrels per day, which is a significant increase over its previous estimate of 1.4 million barrels per day. On the positive side, it adds that a slight improvement in output from Russia has helped the market, leading the bank to reduce its H2 2023 price forecast to $90 - $100 per barrel from an earlier $100 - $110 per barrel.
One person who has consistently criticized oil companies for making profits as regular people suffer is President Biden. In his State of the Union address, the President slammed big oil as he stated:
Have you noticed — Big Oil just reported its profits. Record profits. Last year, they made $200 billion in the midst of a global energy crisis. I think it’s outrageous.
Why? They invested too little of that profit to increase domestic production. And when I talked to a couple of them, they say, “We were afraid you were going to shut down all the oil wells and all the oil refineries anyway, so why should we invest in them?” I said, “We’re going to need oil for at least another decade, and that’s going to exceed…” — and beyond that. We’re going to need it. Production.
If they had, in fact, invested in the production to keep gas prices down — instead they used the record profits to buy back their own stock, rewarding their CEOs and shareholders.
The President aims to tax these record stock buybacks and introduce policies that will encourage investment into energy production so that a global supply shock does not increase prices at the pump.
Today, we'll take a look at which energy companies have raked in the most profit so far, with the top ones being Saudi Arabian Oil Company (TADAWUL:2222.SR), Exxon Mobil Corporation (NYSE:XOM), and Shell plc (NYSE:SHEL).
We made an initial list of the world's largest energy companies based on their market capitalization, allowing us to narrow down our search to the top 30 names. Then, the net income for their latest twelve-month period was determined and the top 11 are listed here.
Most Profitable Energy Stocks
11. CNOOC Limited (HKG:0883.HK)
Trailing Twelve Months Net Income: $15.08 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders In Q4 2022: N/A
CNOOC Limited (HKG:0883.HK) is one of China's largest offshore oil and gas companies. The firm is headquartered in Central Hong Kong and it has production assets all over the world. Some of these are located in offshore China, while others are located in the Middle East, Europe, and other regions.
CNOOC Limited (HKG:0883.HK) expanded its production base to Gabon in January 2023, as it began drilling the Tigre well. The area is estimated to potentially have a whopping 1.4 billion barrels of reserves.
CNOOC Limited (HKG:0883.HK), Occidental Petroleum Corporation (NYSE:OXY), Exxon Mobil Corporation (NYSE:XOM), Saudi Arabian Oil Company (TADAWUL:2222.SR), and Shell plc (NYSE:SHEL) make the cut for the most profitable energy companies.
10. ConocoPhillips (NYSE:COP)
Trailing Twelve Months Net Income: $18.6 billion
Number of Hedge Fund Holders In Q4 2022: 67
ConocoPhillips (NYSE:COP) is an oil and gas exploration and production firm. It drills for different kinds of oils, such as shale oil, heavy oil, and tight oil reservoirs. The company is headquartered in Houston, Texas.
ConocoPhillips (NYSE:COP) has a large pipeline network all over the U.S. which almost spans 30,000 miles. Through this it transports natural gas from its onshore and offshore fields to a variety of facilities for industrial use, power generation, and compression into liquefied natural gas. Additionally, the firm also claims to be on the list of the top five U.S. natural gas marketers since 2002. Insider Monkey took a look at 943 hedge fund holdings for last year's fourth quarter to discover that 67 had bought the company's shares.
ConocoPhillips (NYSE:COP)'s largest investor is Ken Fisher's Fisher Asset Management which owns 6.9 million shares that are worth $814 million.
9. PetroChina Company Limited (SHE:601857.SS)
Trailing Twelve Months Net Income: $19.83 billion (1CNY = 0.14USD)
Number of Hedge Fund Holders In Q4 2022: N/A
PetroChina Company Limited (SHE:601857.SS) is the publicly traded division of the China National Petroleum Corporation (CNPC). The company is one of Asia's largest oil and gas firms, and it is headquartered in Beijing. PetroChina Company Limited (SHE:601857.SS) has several natural gas pipelines through which it supplies more than a trillion cubic feet of natural gas all over China. After producing 4,421 billion cubic feet of marketable natural gas in 2021, the company is aiming to grow this to 55% of its total oil and gas output by 2025. Natural gas accounted for 45.4% of PetroChina Company Limited (SHE:601857.SS) total output in 2021.
8. BP p.l.c. (NYSE:BP)
Trailing Twelve Months Net Income: $27.7 billion
Number of Hedge Fund Holders In Q4 2022: 37
BP p.l.c. (NYSE:BP) is one of the world's largest oil and gas companies. The firm has exploration and production assets all over the world, and operates throughout the energy supply chain, from exploration, production, refining, transportation, marketing, power generation, and more. BP p.l.c. (NYSE:BP) is headquartered in London, United Kingdom.
While BP p.l.c. (NYSE:BP) has announced that it will scale back on its carbon emissions reduction initiatives, the firm agreed to conduct an environmental review of its natural gas facility again in February 2023 after pressure from marine biologists. By the end of last year's fourth quarter, 37 of the 943 hedge funds surveyed by Insider Monkey had invested in the company.
BP p.l.c. (NYSE:BP)'s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 25 million shares that are worth $893 million.
7. Public Joint Stock Company Gazprom (MCX:GAZP.ME)
Trailing Twelve Months Net Income: $27.9 billion (1RUB = 0.013USD)
Number of Hedge Fund Holders In Q4 2022: N/A
Public Joint Stock Company Gazprom (MCX:GAZP.ME) is a Russian company with the majority of its stake owned by the government. The firm is headquartered in St. Petersburg, and it is also one of the largest natural gas companies in the world. Public Joint Stock Company Gazprom (MCX:GAZP.ME)'s operations are primarily located in Serbia, and it has faced a difficult year in 2022 when the firm was sanctioned by the U.S. government due to Russia's invasion of Ukraine.
Public Joint Stock Company Gazprom (MCX:GAZP.ME) entered into yet another bout of controversy in February 2023, when it was revealed that the firm's subsidiary, Gazprom Neft, had created its own militia. Experts postulated that this was because it wanted to protect energy assets, as its NordStream pipeline was sabotaged in 2022. Others, however, weighed in and said the decision will contribute to Russia's military power instead.
6. Equinor ASA (NYSE:EQNR)
Trailing Twelve Months Net Income: $28.7 billion
Number of Hedge Fund Holders In Q4 2022: 16
Equinor ASA (NYSE:EQNR) is a Norwegian state-owned company that is headquartered in Stavanger, Norway. The firm is the largest oil and gas company on the Norwegian continental shelf, and it also has operations in a host of different countries such as Belgium, Nigeria, Poland, Qatar, and the U.S.
Like other big oil and gas companies, Equinor ASA (NYSE:EQNR) is also focusing more attention on renewable energy generation, and on this front, the firm announced in February 2023 that it is considering expanding a British wind power plant by 1.23 Gigawatts. 16 of the 943 hedge funds part of Insider Monkey's Q4 2022 survey had bought the firm's shares.
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is Equinor ASA (NYSE:EQNR)'s largest investor. It owns 9 million shares that are worth $325 million.
Equinor ASA (NYSE:EQNR), Saudi Arabian Oil Company (TADAWUL:2222.SR), Exxon Mobil Corporation (NYSE:XOM), and Shell plc (NYSE:SHEL) are some of the world's most profitable energy firms.
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Disclosure: None. 11 Most Profitable Energy Stocks is originally published on Insider Monkey.