What is War Good for? Oil Profits

Energy Companies, International

What is war good for? Oil profits, if the fact that 2023 was a bumper year for shareholders investing in oil is anything to go by.

While the majority struggle to cope with the cost of living crisis and the hike in energy prices, shareholders in the five largest oil companies can expect record pay-outs totalling more than £79bn, The Guardian reports.

And why? Well one word explains all ‘War’. The ‘big five’: BP, Shell, Chevron, ExxonMobil and Total Energies have made record profits for oil and gas after Russia’s invasion of Ukraine which set off a big rise in the cost of Brent crude and record gas prices.

The Guardian also reports that: “Financial analysts at IEEFA said that theses companies were likely to pay even greater shareholder distributions this year despite weaker commodity market prices leading to lower profits. The pay-outs will also follow a year that is expected to have been hotter than any other on record, with the climate emergency leading to a series of extreme weather events.

“Trey Cowan, an analyst at the IEEFA, said: “At the current pace of distributions via share buybacks and dividends, these five super-majors could set a record for distributions to shareholders in 2023, topping the $104bn spent during the 2022 calendar year.”

Fuel poverty campaigners yesterday slammed the news, which emerged on the day that energy regulator Ofgem increased its energy price cap by 5% in response to rising wholesale prices.

End Fuel Poverty Coalition co-ordinator Simon Francis said: “once again major energy firms are rewarding their shareholders while families face rising energy costs…If only the government closed the loopholes in the Windfall Tax on energy firms’ profits, ministers could have afforded to bring in the measures needed to keep people warm this winter.”

Find out more about the campaign here.