Big Oil is raking in historic amounts of cash, but the windfall isn’t being invested in new production to help displace Russian oil and gas. Instead, executives are rewarding shareholders -- setting the world up for an even tighter energy market in the years ahead.

The West’s five biggest oil companies together earned $36.6 billion over and above their spending in the first quarter, or about $400 million in spare cash a day. It was the second-highest quarterly free cash flow on record and enough to relegate billions of dollars of Russia-related writedowns to mere footnotes in their recent earnings reports.

Oil booms typically spark a chase for higher production -- but not this time. All five supermajors have kept their capital expenditure budgets firmly in check and pledged that this discipline will hold in future years -- even as oil prices have closed above $100 a barrel on all but five days since Russia invaded Ukraine in February. With wells naturally declining in production every year and large projects taking half a decade or more to come online, any expansion lag happening now will push the possibility of new production even further into the future.

“In prior cycles of high oil prices, the majors would be investing heavily in long-cycle deepwater projects that wouldn’t see production for many years,” said Noah Barrett, lead energy analyst at Janus Henderson, which manages $361 billion. “Those type of projects are just off the table right now.”

In short, if consumers are looking for Big Oil to replace Russian production with any urgency, they better look elsewhere.

The last time crude was consistently over $100 a barrel in 2013, Big Oil’s combined capital expenditure was $158.7 billion, almost double what the companies are currently spending, according to data compiled by Bloomberg. The group includes Shell Plc, TotalEnergies SE, BP Plc, Exxon Mobil Corp. and Chevron Corp.

“Discipline is the order of the day,” BP Chief Executive Officer Bernard Looney told analysts Tuesday. The London-based major isn’t budging on its $14 billion to $15 billion spending plans for the year, with its mid-term guidance creeping up to a maximum of $16 billion despite 10% cost inflation in some parts of its business.

Shell, which posted record profits that exceeded even the highest analyst estimate, was equally clear. In her first set of results as chief financial officer, Sinead Gorman repeated time and time again that Shell would keep within its $23 billion to $27 billion range. “Nothing has changed in terms of our capital allocation framework,” she said.

Instead of spending on new projects, companies are opting to reward shareholders after years of poor returns. Exxon, BP and TotalEnergies increased share buybacks while Chevron is already repurchasing record amounts of stock.

There are clear reasons why Big Oil is choosing not to spend more. Chief among them are climate concerns and uncertainty over the future direction of oil demand. Years of pressure from investors, politicians and climate activists came to a head in the past two years, when all the oil majors pledged some form of net zero target by mid-century. BP and Shell actively positioned themselves to move away from oil and gas over the long-term. All are under added pressure to improve returns that dwindled over the past decade due to cost blowouts and low prices.

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