As energy bills rise, oil giants are poised to make unpopular profits
Millions of British homes are preparing for a cost of living crisis prompted by the global gas supply crunch, but the high market prices mean big revenues for the world’s fossil fuel giants. That includes BP, which is forecast to reveal a historic return to multibillion-dollar profits in its results this week.
The oil company is expected to have raked in a profit of almost $4bn for the final quarter of last year, compared with a thin $115m in the same period the year before, in large part due to record-breaking energy market prices around the globe.
The surge in global gas markets through the final months of 2021, combined with an oil price rally to seven-year highs, could catapult the company to a full-year profit of $12.6bn (£9.3bn) compared with a loss of $5.7bn in 2020.
The same trend is visible in the US, where oil giants ExxonMobil and Chevron have in the past week reported net profits of $23bn and $15.6bn respectively for last year – the highest since 2014, when crude last traded above $100 a barrel.
The scale of BP’s return to profit will come as little surprise to those who recall the claim in December by its chief executive, Bernard Looney, that the energy crisis had transformed the company into a “cash machine”.
Some people may be tempted to use “outrage generator” as a more apt description, following last week’s news that the gas market highs will also lead to record high energy bills and drive millions of households into fuel poverty.
On Thursday, Shell reported a quadrupling of profits, fuelling fresh calls for the UK Treasury to impose a windfall tax on companies that stand to benefit from the energy crisis, in order to fund extra help for hard-hit households.
Shell reported better than expected profits of $6.4bn
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