Oil companies facing record dividends: What that means for investors

Oil companies facing record dividends: What that means for investors

According to a report by www.wallstreet-online.de, the major oil companies planned to increase their distributions to a new record level. Over $100 billion is expected to be paid out to shareholders in the next few weeks.

This decision contrasts with public outrage in the face of a torrid 2023, already considered the hottest in history, and in the midst of a climate crisis with extreme weather events. Already, these companies' 2022 dividends and share buybacks totaled $104 billion, driven by record profits from rising oil and gas prices after Russia's invasion of Ukraine.

This decision has been met with much criticism given the global climate crisis and pressure on companies to reduce their CO2 emissions. In the coming years, the impact on companies' image and their market value could become clear. If the climate crisis worsens and influences energy policymaking, oil companies could face a decline in demand and increasing regulatory hurdles. This could result in lost sales and a decline in market value. An increasing divestment movement by investors shifting to low-carbon assets could also complicate financing options for oil companies.

The decisions of oil companies face major challenges in a changing global energy economy. How they respond to these changes and adapt their strategies for a sustainable future is crucial.