Big Oil Prepares for Lower Prices Amid Rising Profits

Big Oil's financial discipline is shifting investor perception as it prepares for potential lower oil prices. The sector's profit statements and balance sheets reveal that instead of distributing huge war windfalls to shareholders, the supermajors are focusing on paying down debt and restructuring operations.

Chevron reduced its leverage by $8 billion in the second quarter, while ExxonMobil also slashed its debt. Meanwhile, BP warned staff about potential oversupply and lower oil prices in the coming months. Shell and Total have kept their share buybacks below last year's levels despite higher margins.

The sector is paying a price for its newfound financial discipline, with most majors' shares lagging behind the commodity price increase of 32% so far this year. However, saving money during booms can become a tailwind in downturns.