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The oil industry has historically been politically conservative. In turn, Democratic politicians have often been hostile toward the industry.

Nevertheless, oil companies have recorded some of their largest profits during Democratic administrations. For example, neither President Obama nor President Biden was cozy with the oil industry, but the industry profited enormously under both presidents.

The primary driver of oil company profits is simply the price of oil. If a president takes actions that drive oil prices higher, that will likely drive oil company profits higher.

Consider two different types of policies. One policy encourages producing as much oil as possible. That would tend to increase oil supplies and keep prices in check. The other policy restricts drilling, which ultimately decreases supplies, and drives prices higher. Which policy is more conducive to higher oil industry profits?

In practice, it’s not quite as simple as that. There is also the demand side of the equation, and the oil market is global. So, regardless of what a U.S. president does, it can be offset by the actions of OPEC (for example).

Still, I thought it might be interesting to look at the evolution of ExxonMobil’s (XOM) profits during the last four presidential administrations. Because ExxonMobil is the largest publicly traded oil and gas company, it is a good proxy for the overall profitability of the industry.

George W. Bush was inaugurated as the 43rd president on January 20, 2001. He was a pro-oil president, but he also passed comprehensive energy policy that increased the production of renewable and alternative energy. During his first term, oil consumption climbed above 20 million BPD for the first time in the nation’s history. Domestic oil production fell every year he was in office.

Oil prices climbed steadily throughout Bush’s eight years in office. According to the FactSet database, ExxonMobil’s net income was $15.1 billion in 2001, fell to $11.0 billion in 2002, and peaked at $45.2 billion in 2008 just before 2008-2009 recession caused oil prices to collapse. For the eight years President Bush was in office, ExxonMobil earned a total of $233.9 billion.

Barack Obama was inaugurated as the 44th president on January 20, 2009. The economic sluggishness initially continued, but the impact of hydraulic fracturing began to be felt in President Obama’s first year in office. In a reversal of the long decline that began in 1970, crude oil production would rise all four years of Obama’s first term. But global demand was also rising, and that caused oil prices to rapidly rebound.

During the recession that marked President Obama’s first year in office, ExxonMobil’s profits fell to $19.3 billion. But then they rose for the next three years, reaching $44.9 billion by 2012. Near the end of Obama’s second term, Saudi Arabia and OPEC declared a price war on the U.S. shale oil industry. ExxonMobil’s profits fell to $7.8 billion in 2016, Obama’s last year in office.

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ExxonMobil’s Net Income Since 2001. ROBERT RAPIER

During Obama’s eight years in office, ExxonMobil earned $224.8 billion. If not for two events — assuming the presidency during a recession and OPEC’s price war — ExxonMobil’s profits under Obama would have likely eclipsed those under Bush.

Prices rebounded in 2017, President Trump’s first year in office. ExxonMobil earned $19.7 billion that year. Profits would remain in that range over the following two years. But in 2020 the Covid-19 epidemic was the primary driver behind ExxonMobil’s $22.4 billion loss for the year. Over the four years Trump was in office, ExxonMobil earned $32.5 billion.

When President Biden was inaugurated in 2021, oil prices were on the rise. The economy was recovering rapidly from the pandemic crash, but oil production was lagging. That sent oil prices soaring, and then Russia’s invasion of Ukraine in 2022 — and the decision by the Biden Administration to cut off Russian imports — helped drive oil prices back above $100 a barrel.

Biden tried to counter this by releasing oil from the Strategic Petroleum Reserve, but ExxonMobil still recorded a record $55.7 billion profit in 2022. During the first three years of the Biden Administration, ExxonMobil reported profits of $114.8 billion.

Thus, contrary to what one might think, during the past four presidential administrations ExxonMobil’s highest profit has come under a Democrat (Biden), and their biggest loss came under a Republican (Trump). However, in both cases there were mitigating factors that extended well beyond the policies of the respective presidents.

Nevertheless, ExxonMobil has made more money each year under President Biden than it did in any year under President Trump.

The oil industry’s relationship with politics has been complex. Historically, it leaned conservative, while Democratic politicians often expressed hostility toward it. However, oil companies have thrived during Democratic administrations. Presidents like Obama and Biden, despite not being cozy with the industry, oversaw substantial profits. The primary driver of these profits is oil prices. Policies that increase prices tend to benefit oil companies. But global demand, geopolitical factors, and OPEC actions also play a major role.

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