The big oil energy giants like ExxonMobil, Shell, Total Energies, BP, and Chevron equity shares are at all-time highs. Many investors are racing to buy the shares after companies declared huge profits quarter after quarter and many analysts are betting on their future. It is a very high risk at present in these companies because their profits mainly depend on the prices of crude oil and whatever the prices of crude, their exploration, and production costs remain the same. If the crude oil prices are high, they get the best margin and declare a huge profit. If prices are low the profit margin to sell will decrease so they declare losses. The main reasons for any sudden rise in crude oil prices are trade wars, sanctions, wars, geo-political tensions, and natural or man-made disasters.
As crude is considered like liquid gold it is hard to trace the origin of crude even though we have put restrictions on it and somehow it finds a way to mix into the global mainstream but it will take some time after that global crude oil prices will be stable. In the upcoming quarters, we can see the downfall of their profit for sure.
Previously the big energy giants pledged to global carbon zero but the worst thing is because of huge profits they are revising their investments we can see huge losses on these investments because the demand will be normal after some days. History of their books says profits are not constant so we should avoid investing in these big global energy giants because their profits and share prices are at all-time highs and with any correction in global crude oil prices, we can see losses and heavy fall in their share prices, so please kindly avoid investing for now.
