It is time for Quarter 2 earnings reports from a variety of companies, among them Big Oil. Quarter 1 Big Oil earnings were rather spectacular, but that didn’t include the amazing oil prices seen in Quarter 2 of 2008.

Photo: Azfar Hakim, Creative Commons, Flickr

Now, though, it the time for Big Oil profit reports to start rolling in. And already the results are stunning. Royal Dutch Shell (RDS-B) is enjoying a record profit of $11.6 billion. That’s for just one quarter. CNN Money reports on the impact of the price of oil on RDS-B earnings:

The company said its selling price per barrel of oil was around $112, up from $64 a year earlier. That pushed earnings at its main exploration and production arm up 90% to $5.88 billion, despite a 1.1% fall in production to 3.05 million barrels of oil and equivalents per day.

Even refining profits rose for RDS-B, to %4.54 billion, although they would have been higher if margins weren’t so weak here in the U.S. No wonder most Big Oil companies are all about increased exploration and more upstream production. It’s not so much about "energy security" as it is about massive profits. The market has proven it will bear these prices no matter how much more drilling is done.

Other Big Oil companies are expected to post rather large profits as well, especially Exxon Mobil (XOM), which some estimates have weighing in at $13 billion for Quarter 2 (of course, we won’t know for sure until "official" information comes in).

I need this one explained to me: With all these profits, why do Big Oil companies need special tax breaks and government subsidies?

Disclosure: I do not own Big Oil stock.

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