After energy prices soared last year as a result of Russia’s invasion of Ukraine, oil and gas giant Shell has announced record annual profits.
In its 115-year history, the company’s 2022 adjusted earnings of $39.9 billion (£32.2 billion) were the highest ever.
Following Russia’s invasion of Ukraine, oil and gas prices increased, which resulted in energy companies making record profits.
Given that households are struggling with inflation, the profits have increased pressure on businesses to pay windfall taxes.
Last year, the UK government introduced a windfall tax – called the Energy Profits Levy – on the profits of firms to help fund its scheme to lower gas and electricity bills.
Oil and gas prices had begun to rise after the end of Covid lockdowns but rose sharply after Russia’s invasion of Ukraine, resulting in bumper profits for energy companies.
The price of Brent crude oil climbed above $120 a barrel in March 2022, but has fallen back since. Oil prices are now below the level seen before the invasion of Ukraine.
Gas prices remain elevated but have been capped for consumers by the government.
Shell chief executive Wael Sawan said the firm’s results “demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world”.
“We believe that Shell is well positioned to be the trusted partner through the energy transition.“