As a result of Russia’s invasion of Ukraine, which drove oil and gas prices rising, Shell’s net profit climbed to a record $42.3 billion last year, the British energy giant announced Thursday.
The group’s results statement showed that the post-tax sum was more than double what was reached in 2021. In 2022, revenue soared 45 percent to a stunning $381 billion, echoing enormous advances made by competitors.
Massive profits for energy companies have angered the public in the midst of a cost-of-living crisis fueled by exorbitant energy prices.
Greenpeace, an environmental advocacy organization, demonstrated outside Shell’s London offices on Thursday, alleging that Shell is “profiting from climate disaster.”
Following major buybacks earlier last year, Shell announced it would return an additional $4 billion to shareholders and, in light of the record earnings, it would dramatically increase its dividend.
“Our results in the fourth quarter and across the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world,” new chief executive Wael Sawan said in the results statement.
Ben van Beurden was replaced as CEO at the beginning of the year by Sawan, the former head of Shell’s renewable energy division.
Fossil fuel production will continue to be essential to driving the global economy over the next 20 years, despite firms making an increasing effort to promote themselves as more environmentally friendly and nations making gradual progress toward a carbon net-zero society.
Although the conflict between Ukraine and Russia may hasten the global shift away from fossil fuels, Shell’s rival BP stated on Monday that “oil continues to play a vital role in the global energy system for the next 15-20 years.”
Oil and gas costs skyrocketed after neighboring Russia invaded Ukraine a year ago.
The war reduced supply of fossil fuels, which Russia produces in large quantities.
The announcement that US energy giant ExxonMobil had set a record for annual net profit at about $56 billion and given huge windfalls to shareholders came before Shell’s update on Wednesday.
As a result, US President Joe Biden slammed American energy behemoths, particularly Chevron, demanding that they should be assisting in lowering energy prices during a crisis in the cost of living.
The only thing preventing Big Oil from raising output (and thus cutting prices), according to a tweet from Biden on Tuesday, is their choice to pay billions to shareholders rather than reinvesting earnings.
Exxon’s record earnings were “outrageous,” the White House spokesperson told the BBC, especially after “the American people were forced to pay such exorbitant prices at the pump” in the wake of the Russian invasion. This prompted the president to step in.
Governments have enacted windfall taxes on the enormous earnings in an effort to lessen the suffering for the public.
According to Shell, the business would lose nearly $2 billion due to windfall taxes the European Union and the United Kingdom imposed as a result of the revenue spike.
“Shell has once more flexed its financial muscles on a massive scale while riding the waves of an economic cycle which can bring major challenges as well as rewards,” Richard Hunter, head of markets at Interactive Investor, said following the results update.
“The fluctuating opinions surrounding demand from China following its reopening will continue, and there could also be bumps in the road should even a mild global recession ensue.”