At current oil prices, the industry is projected to generate record-high revenues not seen in 25 years.

In recent weeks, major oil companies have reported profit growth for the first three months of the year, the economic daily Vilaggazdasag writes. All this is due to the fact that

futures quoted for the world’s leading Brent crude oil rose by more than 40 per cent this year, to over 130 US dollars a barrel in the wake of the Ukraine-Russia conflict.

Although prices have dropped since then, the price of Brent oil is still above 100 US dollars a barrel, the Hungarian portal notes, adding that international financial institutions expect that it will average around 110 US dollars a barrel for 2022 as a whole. Due to current oil prices, the industry is forecast to achieve revenues unseen in 25 years, according to analysts.

Vg.hu notes that most of the oil industry’s profits come from the upstream industry. The exploration and production sector, which includes the upstream oil industry, is set to post record profits this year thanks to high oil and gas prices. According to Rystad Energy’s research, total free cash flow (FCF), that is, the company’s cash from operations after expenses

will grow to 834 billion dollars, a 70 per cent increase on the 493 billion dollar profit in 2021.

As a result of the COVID-19 pandemic and the subsequent oil price crash, the total free cash flow (FCF) of state oil and oil exploration companies fell to around 126 billion dollars in 2020, half the amount of the previous year. With the global economy recovering and fuel demand growing, FCF levels last year rose to nearly 500 billion dollars, the highest ever financial result for the upstream industry, Vilaggazdasag concludes.