Big Oil has made $281B profit since Russia invaded Ukraine

This story was originally published by The Guardian and appears here as part of the Climate Desk collaboration.

The world’s five largest listed oil companies have made profits of more than a quarter of a trillion dollars since Russia’s invasion of Ukraine led to dramatic increases in energy prices and household bills.

The “super-majors” — BP, Shell, Chevron, ExxonMobil and TotalEnergies — have made $281 billion (£223 billion) since the war began in February 2022, according to Global Witness.

The U.K.-based pair, BP and Shell, have made a combined $94.2 billion (£75billion) in profits since the conflict began. Global Witness estimates that this is enough to cover all Britain’s household electricity bills for 17 consecutive months.

Shell, which has made $58.9 billion (£47 billion) in profits since the second quarter of 2022, is also in the process of cutting up to 330 roles from its low-carbon solutions unit in a renewed focus on high-profit oil projects this year.

BP, which last year also moved to scale back its climate goals, has made $35 billion (£28 billion) in profits since the start of the conflict.

The European and U.S. majors — Chevron, ExxonMobil and TotalEnergies — have made combined profits of more than $187 billion (£148 billion).

“Russia’s invasion of Ukraine has been devastating for millions of people, from ordinary Ukrainians living under the shadow of war to the households across Europe struggling to heat their homes,” said Global Witness’s senior fossil fuels investigator Patrick Galey.

“This analysis shows that, regardless of what happens on the front lines, the fossil fuel majors are the main winners of the war in Ukraine.”

The profits of international shipping companies and foodstuff suppliers have also soared over the last two years, leading some economists to call for targeted price controls during an emergency.

Shell made a U-turn last summer on a pledge to cut oil production each year for the rest of the decade in a strategic shift to target fossil fuels and “reward our shareholders today and far into the future.”

The five super-majors are forecast to reward investors with record payouts of more than $100 billion (£79 billion) in 2023 when figures for the full financial year are published in the coming weeks, despite growing public outrage and criticism of the fossil fuel profit machine.

The Institute for Energy Economics and Financial Analysis (IEEFA) said companies were likely to pay shareholders even more this year despite weaker commodity market prices leading to lower profits.

The big oil companies enriched shareholders with dividend payments and share buybacks worth $104 billion in 2022, according to IEEFA.

“They are now spending their gains on investor handouts and ever more oil and gas production which Europe doesn’t even need and the climate cannot take,” said Galey. “This is yet another way in which the fossil fuel industry is failing consumers and the planet.”

Last year was the hottest year on record by a huge margin, driving heat waves, floods and wildfires, damaging lives and livelihoods across the world.

Analysis showed some extreme weather, such as heat waves in Europe and the U.S., would have been virtually impossible without human-caused global heating.

Isabella Weber, an economist at the University of Massachusetts, Amherst, has charted the rising profits of corporations in the food, shipping and oil and gas sectors.

She told members of the European Parliament recently that targeted price controls were needed to prevent firms from exploiting a crisis to drive up profit margins and shareholder dividends at the expense of customers.

“The energy crisis has been the worst of times for most Europeans, but the best of times for energy companies. When emergencies mean record profits in essential sectors, public and corporate interests are not aligned. We need a new playbook of emergency economics.

“This raises the question of whether we can entrust the systemically significant sectors purely to these private corporations that have learned that … in the worst shock … Europe has experienced in recent history, they have reaped the largest profits in their whole history.”