Big Oil’s chemical high
Covid swells petrochemical earnings at ExxonMobil, Shell and Total
Fate loves irony. Having been crushed by the 2020 Covid-induced oil crash, integrated US and European supermajors are reporting giddying post-lockdown earnings. Profits in the second quarter were propelled in part by handsome margins for petrochemicals, which are used inter alia in medical equipment used to fight the pandemic. Meanwhile, the energy transition is driving demand for fossil-derived products and materials.
As western consumers emerged from lockdowns, North American and European chemicals markets witnessed a confluence of robust demand and tight supply for both polyethylene and polypropylene – plastic polymers derived from fossil fuels that are used in a wide variety of everyday consumer products and commercial/industrial applications.
ExxonMobil’s chemical division recently reported its best-ever performance, earning $2.3 billion in Q2’21. The major driver for this was widening Atlantic Basin margins for polyethylene and polypropylene.