Traditional measures of profitability. Profit returns divided by the volume of resources devoted to the activity. Although oil and gas companies’ profits have risen to record highs as the price of oil has soared, their profitability as measured by return on capital employed has stagnated. In the upstream side of the business average return on capital in 2007 was just 1% point higher than in 2004 even though the average price of a barrel of oil was $30 higher. One of the reasons for this is because capacity shortages in the supply chain, in everything from drilling rigs to steel pipes to skilled staff, have caused costs of exploration and production to rise in line with their revenues. Indeed, services companies, which work for the oil producers have typically done much better out of the boom in the industry.