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Big Oil Spends on Investors, Not Output, Prolonging Crude Crunch

  • Second-highest cash haul ever not enough to spur investment
  • Wary tide will shift again, majors prefer to reward investors
This Shell refinery in Rotterdam.

This Shell refinery in Rotterdam.

Photographer: Koen Van Weel/AFP/Getty Images

Big Oil is raking in historic amounts of cash, but the windfall isn’t being invested in new production to help displace Russian oil and gas. Instead, executives are rewarding shareholders -- setting the world up for an even tighter energy market in the years ahead.

The West’s five biggest oil companies together earned $36.6 billion over and above their spending in the first quarter, or about $400 million in spare cash a day. It was the second-highest quarterly free cash flow on record and enough to relegate billions of dollars of Russia-related writedowns to mere footnotes in their recent earnings reports.