It was only Monday this week that we reported that – “BP has just recorded its highest quarterly earnings in more than a decade. Of course, it is taking full advantage of soaring prices for hydrocarbons and “exceptional” oil and gas trading revenues. Interestingly, this earnings record includes the value of its business write-down in Russia to almost zero.”
Hot on the heels of that announcement came Shell. Its profits leapt to an all-time high of $9.13 billion in the first twelve weeks of this year as the oil and gas group repeated BP’s performance by cashing in on soaring prices after Russia’s invasion of Ukraine.
Analysts had forecast $8.67 billion in profits. The figures exclude a $3.9 billion post-tax charge for exiting its interests in Russia, which led to a more muted increase in headline profits.
Along with BP’s announcement, Shell’s numbers have only increased the pressure by Labour MP’s who are calling for a windfall tax. The adjusted earnings for this quarter represents a tripling of profits from $3.23 billion in the same period last year.
Shares in Shell rose by more than 3 per cent in early trading as the company promised to return a higher share of cash flow to investors in the second half of the year. It now plans an $8.5 billion share buyback boosting dividend payments to shareholders.
In the meantime, the cost of living crisis in Britain continues to gain political influence as it has now been reported that 4 in 10 households are already struggling to pay for energy which has typically increased by an average of 54 per cent since the price cap was reviewed.
As the summer ends, the energy price cap will be reviewed again by Ofgem in October and analysts are forecasting another very damaging rise of over 20 per cent.