Energy giants, including Shell, have posted strong profits in the first three months of the year as global oil prices soar due to the war in the Middle East (Ben STANSALL) · Ben STANSALL/AFP/AFP
European oil and gas companies who posted huge profits in the first quarter on soaring prices caused by the war in the Middle East face new calls from London to Paris to tax their outsized gains.
Shell rounded out the major energy producers’ earnings season on Thursday by announcing net profit of nearly $5.7 billion (around 4.8 billion euro), up 19 percent on the first quarter of 2025.
The group explained it had benefited from higher prices and “increased refining margins,” as well as “a higher contribution from trading activities”.
It was a similar story for British rival BP, which reported a sharp rise in profits at the end of last month, posting $3.84 billion while TotalEnergies saw their profits soar 51 percent to $5.8 billion.
In contrast, US energy companies ExxonMobil and Chevron saw their profits decline, results affected by an unfavourable time lag between the sale and delivery of products within the derivatives markets.
The US-Israeli war on Iran prompted Tehran to blockade the key energy chokepoint of the Strait of Hormuz, causing a sharp drop in oil supplies on the market and a surge in prices.
A barrel of Brent crude, the global benchmark, averaged around $100 in March, with peaks of $120, compared with $70 before hostilities began in late February.
That notably helped European trio BP, Shell and TotalEnergies, which have strong trading operations -– unlike their US counterparts and rivals ExxonMobil and Chevron, which are more reliant on production activities.
The big difference this quarter is that “BP, Shell and Total benefited from both the higher prices and the turbulence itself,” Stephen Innes, analyst with SPI Asset Management, told AFP.
He added that “the European majors looked less like traditional oil companies this quarter and more like sophisticated volatility traders operating inside the global energy system.”
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From London to Paris the strong results have sparked calls to tax oil company windfall profits, as occurred following the war in Ukraine which started in 2022.
“Once again, the fossil fuel giants are raking in massive profits,” lamented Danny Gross of NGO Friends of the Earth in a statement which called for increased taxes on profits.
In the UK, oil companies operating in the North Sea remain subject to the Energy Profits Levy, a temporary levy on profits arising from the upstream production of oil and gas introduced in 2022, which has been extended and increased several times.
It is currently set at 38 percent of profits until 2030 and is in addition to the 40 percent of taxes already in force in the sector. However, it only applies to profits derived from UK oil and gas production.