(Bloomberg) -- Awash in cash after their third-highest quarterly earnings on record, the world's largest oil companies are uncharacteristically wary about how to spend it.
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ExxonMobil Holdings Corp. and Chevron Corp. are stockpiling the cash, BP Plc is paying down debt and other liabilities, and Shell Plc and TotalEnergies SE promise they'll be cautious about future investments. It all points to an industry that has suffered the ill effects of overspending during previous booms — and a feeling that current high prices may not last much longer.
"We will be disciplined — we will not allow the surplus cash to burn a hole through our pockets," Shell Chief Executive Officer Wael Sawan said on a call with analysts. "That is the flaw that we have seen historically in our sector and in our company. And this time, we have learned our lesson."
The five Western oil majors spent heavily on megaprojects during previous periods of high crude prices only to be caught out when oil subsequently fell, and they wrote down about $180 billion in assets from 2010 to 2020. Executives are rarely able to correctly call the top or bottom of the notoriously boom-and-bust oil business, and the current crop is pledging to give up even trying.
"We're not going to ride the wave of the cycle," ExxonMobil Chief Financial Officer Neil Hansen said in an interview after the company said it chose not to raise share buybacks despite surging profits. "We're not going to overextend during a temporary market disruption."
Disruption from the US war with Iran has pushed oil prices above $100 during much of 2026. That, along with a global squeeze on refining capacity, has boosted oil company earnings and stock prices. BP has rallied 45% this year, ExxonMobil is up 56% and Chevron 55%.
Those three companies' shares failed to keep pace with the 2.4% gain in oil prices on Friday, and one reason was the lack of additional buybacks. But there are signs investors like that approach. The five supermajors now carry about $276 billion of debt combined, almost 30% less than at the end of 2020, according to data compiled by Bloomberg.
"Discipline is what we're looking for," said Marcus McGregor, managing director of commodities research at Conning, which manages about $191 billion in assets. "Just stay the course — don't be too reactionary and really just protect the balance sheet."
Chevron reduced its buyback in the third quarter to $2.5 billion, the low end of its guided range, despite posting the fourth-highest profits in its history. Even Shell, which increased its buyback 65%, only did so within a strict investment framework that requires the company to distribute a fixed percentage of cash flow to shareholders.
"We manage our business in decades, not quarters," Chevron CFO Eimear Bonner said in an interview. "We certainly don't change our capital allocation or financial priorities on the back of a volatile quarter."
The conservatism is in stark contrast to Big Tech, which is being punished by investors for a debt-fueled artificial intelligence spending frenzy that has yet to yield much in the way of cash returns. But some investors believe energy companies run the risk of not investing enough in the future.
"We would like to see them do something that would be a little bit more additive to long-term growth," said Brian Mulberry, chief market strategist at Zacks Investment Management, which oversees about $33 billion in assets.
The last time ExxonMobil and Chevron made profits this high was in 2022. A year later, both announced acquisitions worth about $60 billion apiece, for Pioneer Natural Resources Co. and Hess Corp. respectively. But Chevron CEO Mike Wirth tossed cold water Friday on the notion his company is on the verge of another megadeal.
"The history books aren't full of great deals that were done at $100 oil," he said.
TotalEnergies CEO Patrick Pouyanné had similar sentiments, emphasizing he prefers to buy during downturns and that the French oil major has a plethora of bolt-on growth opportunities.
"We will not become procyclical because suddenly we have more cash," he said.
The windfall was probably more important to BP than any of its peers. Still reeling from writing off many of its clean energy investments, and the more than $60 billion in costs it incurred from the catastrophic 2010 Deepwater Horizon oil spill, the company is squarely focused on strengthening its balance sheet, according to Meg O'Neill, who was appointed CEO earlier this year.
"It's very easy to get caught up in high prices and think that's an opportunity to distribute cash," she said on a call with reporters Friday. BP still carries "more debt and more leverage than we really can afford in a low-price scenario."
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