Oil prices at record highs may be hurting the whole world, but oil companies can continue laughing all the way to the bank. Both America's and Europe's largest oil companies recorded quarterly profits in excess of $10 billion each even as people worldwide reeled under the inflationary effects crude at nearly $130 a barrel.

When a company can sell the same product at a 74 per cent higher price than it commanded a year ago, record profits don't seem unlikely. Both US-based Exxon Mobil Corp. and Europe-based Royal Dutch Shell exploited this to the maximum and rakied in $11.68 billion and $11.6 billion in quarterly profits respectively, overtakling their own best ever records.

For Exxon, it broke its own record for the highest quarterly profit for a publicly traded US corporation, while Shell recorded a whopping 38 per cent increase over corresponding figures last year. However, even these eye-popping numbers were near to or less than analysts' expectations.

Exxon's second-quarter net income rose 14 per cent to $11.68 billion, or $2.22 a share, in the quarter. Excluding one-time items, the company earned $2.27 a share, more than a quarter below analysts' expectations.

In the quarter that ended 30 June, the Irving, Texas, oil giant spent $8 billion buying back shares of its stock, compared with the $7 billion Exxon invested in exploration and other projects. The company also paid stockholders dividends worth $2.1 billion during the period. Second-quarter revenue totaled $138 billion, up 40 per cent.

Shell, the world's second-largest non-government controlled oil company by market value, reported a 5 per cent rise in second-quarter earnings to $7.9 billion, and said that excluding one-time items, it beat analysts' forecasts.

The Anglo-Dutch company said that Nigerian unrest damped production during the quarter and that its net investment in projects totaled $5.7 billion. Shell gave $3.8 billion back to shareholders through stock repurchases and dividends during the quarter.

The enormous profits drew criticism from politicians because of the high prices being paid by consumers. US presidential candidate Barack Obama termed Exxon's earnings "outrageous" and called for an end to the "tyranny of oil."

US Representative Edward J Markey, chairman of the House Select Committee on Energy Independence and Global Warming, complained yesterday that the companies were on track to collect a combined $160 billion in profit this year, up from $123 billion in 2007.

"We are making very large profits, I know that," Shell chief executive Jeroen van der Veer told reporters on a conference call. "But we are making very large investments," he said, referring to investments in exploration and production.

"We're investing in any project that we have ready for funding. We do that first. Then the money that's earned in our business is the shareholders' money, and we return it to the shareholders," Exxon Vice President Henry Hubble said in a conference call with reporters. "We'd like to do more" to increase energy supplies and would do more if the company had access to off-limits areas, he said.