By Anders Lorenzen

As consumers continue to pay a premium for energy, the oil and gas industry is reaping ever higher profits.

The world’s largest oil and gas companies have recorded yet another record-breaking set of profits. Exxon Mobil, Chevron, Shell, BP and Total Energies have produced a combined profit of $58 billion. 

Instead of using profits to reduce energy bills or funnelling them into low-carbon projects, the companies are largely using them to reward shareholders and buyback programmes.

Two interlinked crises

The profits come in the middle of a cost of living crisis, in which both emissions and energy bills are rising, with the impacts for all to see through record temperatures and unprecedented wildfires. 

The energy industry has been hit by a series of shocks first with the pandemic, then a shortage of gas supply and then the war in Ukraine – the latter two developments have sent energy prices soaring.

The UK has imposed a windfall tax on oil and gas producers, similar discussions are afoot in the US but will likely face gridlock in Congress. 

Too much pressure to shift toward renewables

Oil executives were quick to shift the blame, with Shell CEO Ben van Beurden arguing “These (profit) margins are not our doing, they are the doing of how global markets play out”. He complained that the pressure on companies to move away from oil and gas and towards renewables was one of the reasons.

Experts have argued that companies that these high profits could be instrumental in significantly funding the energy transition. But instead, oil and gas majors are not diversifying with any meaningful effort into clean energy and other clean-tech solutions, and continuing with business as usual.