Amid the Covid pandemic and the Ukraine conflict, energy giants are reporting some of the largest increase in profits. Shell made $9.13 billion in profits in the first quarter of 2022, nearly tripling the $3.2 billion reported last year for the same quarter. Other firms including BP, Equinor and TotalEnergies also report substantial increase in profits.
Despite record profits, Shell’s chief executive Ben van Beurden told the BBC that the war in Ukraine had caused “significant disruption to global energy markets”, and that the impacts of this uncertainty and the rising costs “are being felt far and wide”. Shell reportedly increased its cost by $3.9 billion as countires around the world reduce their dependence on Russian oil and gas amid the Ukraine conflict.
Shell paid out $5.4 billion to shareholders in the last quarter, while pledging to invest £20-25 billion in the UK in the next decade in low carbon energy and gas and oil supplies. “We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can”, van Beurden added.
Oil prices have known to be increasing before the Ukraine conflict, as the Covid pandemic brought widespread supply chain disruptions. The rising prices of oil and gas are worsening the cost of living crisis around the world. The UK’s inflation currently stands at 7%, the highest in 30 years, as energy bills, fuel costs and food prices rises. The Bank of England is speculated to announce new interest rates to lift borrowing costs, tempering inflation.