Figure 2. Big Oil is on course for a near-record 38 billion USD in share buybacks.

Gas prices are at record levels and oil is trading at a seven-year high of more than $90 a barrel, resulting in big profits for the supermajor group rounded out by Total Energies, Eni and Equinor. Banks including Goldman Sachs expect Brent crude to trade at more than $100 this year, with some predicting that if Russia invades Ukraine it will trigger a sharper spike in energy costs.

Biraj Borkhataria at RBC Capital Markets said: “The sector is in the best shape it’s been in for a long time. Now the question is the duration of the cycle.” The underperformance of the companies’ shares during the pandemic meant that management teams felt their shares were undervalued and that buybacks were cheap, he added.

Shell is set to lead the pack in 2022, buying back more than $12bn of its own shares, according to RBC and Bernstein. At least $8.5bn of those buybacks will be completed in the first half of the year, Shell said this month, including $5.5bn from the sale of its assets in the US Permian basin.

Chevron bought back shares worth $1.4bn in 2021 and has said it will spend $3bn to $5bn on buybacks this year.