As oil and gas prices continue to rise, the UK company Shell has recorded its most considerable quarterly profit since 2008. Shell reported earnings growth of $9.1 billion for the first quarter of 2022, compared to $3.2 billion in growth over the same period last year and $6.4 billion in the fourth quarter of 2021.
The increase in profit comes even after the company wrote down $3.9 billion as post-tax due to its decision to exit operations in Russia. The corporation had previously warned that it would have to write off $4-5 billion in assets if it left the nation. According to the company, these costs do not affect adjusted profits.
“The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted,” Shell CEO Ben van Beurden said in a statement.
He added, “The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”
Shell’s record was boosted by high oil and gas prices, solid refining profits, and a strong performance in the stock market. The company’s stock price rose 12.85% from January to the end of March. After Shell announced its first-quarter profits Last Thursday, its stock price rose a further 3%.
While many oil and gas companies are taking significant write-downs due to leaving Russia, Shell’s earnings mirror those of the sector as a whole, which has witnessed record profits. Fellow UK company BP saw its first-quarter net earnings surge to their highest level in more than a decade. Rising oil and gas prices also boosted first-quarter profits for TotalEnergies, Equinor, Chevron, and ExxonMobil.
Unions and environmentalists concerned about rising energy costs have slammed fossil fuel companies for turning massive profits as people struggle to pay their bills. Tessa Khan, founder of the Uplift campaign group and an international climate change and human rights lawyer, called it “obscene.”
“Yet again we see these wealthy firms extracting billions in profit from one of our most basic needs,” said Friends of the Earth Scotland’s Just Transition Campaigner Ryan Morrison. “BP and other fossil fuel bosses are getting even richer as the price of energy pushes millions more homes into fuel poverty and forces people to choose between heating and eating.”
Opposition politicians, such as those in the Labour Party, have often urged UK Prime Minister Boris Johnson’s government to raise taxes on oil and gas corporations to assist families struggling to pay energy prices.
According to Finance Minister Rishi Sunak, this might happen if oil and gas corporations do not adequately reinvest their profits. Johnson has rejected any new tax on oil and gas corporations because he fears it will deter investment and keep oil prices high in the long run.