Exxon has cut spending and its work force in recent years, even while boosting production in the Permian basin straddling Texas and New Mexico and off the coast of Guyana. Darren Woods, the company’s chief executive and one of the witnesses at the Wednesday hearing of the House Energy and Commerce Committee, has insisted that Exxon is working to reduce its greenhouse gas emissions while meeting the country’s energy needs but that it is not responsible for rising prices.
The Russia-Ukraine War and the Global Economy
Card 1 of 6Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has already caused dizzying spikes in energy prices and is causing Europe to raise its military spending.
The cost of energy. Oil prices already were the highest since 2014, and they have continued to rise since the invasion. Russia is the third-largest producer of oil, so more price increases are inevitable.
Gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. Natural gas reserves are running low, and European leaders worry that Moscow could cut flows in response to the region’s support of Ukraine.
Food prices. Russia is the world’s largest supplier of wheat; together, it and Ukraine account for nearly a quarter of total global exports. Countries like Egypt, which relies heavily on Russian wheat imports, are already looking for alternative suppliers.
Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
Mr. Woods will be joined at the hearing by the chief executives of BP America, Chevron, Devon Energy, Pioneer Natural Resources and Shell USA. The committee will also hear from H.R. McMaster, who was a national security adviser to President Donald J. Trump and is now a senior fellow at the Hoover Institution at Stanford.
“Because oil is a global commodity, Shell does not set or control the price of crude oil,” Gretchen H. Watkins, president of Shell USA, is set to tell the committee, according to prepared remarks released on Tuesday night. “Today’s crisis and the pressure on hydrocarbon supplies and prices reveal the urgent need to accelerate the energy transition.”
The debate over who is responsible for rising fuel prices is playing out beyond Capitol Hill. The League of Conservation Voters is displaying an art installation depicting a wall of oil barrels on the National Mall in Washington this week to highlight what it calls “the oil industry’s price gouging.”
Conservatives have countered that oil prices move in cycles and that after making record profits one year, companies often lose money in other years.
“If oil companies are engaging in price gouging now, it’s a mystery why they couldn’t do it when gas was $2.20 a gallon and they were losing money,” said Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute in Washington.