LONDON — Oil giant Shell on Thursday reported bumper first-quarter profits on the back of soaring commodity prices, fueling calls for a one-off windfall tax on oil and gas companies to help U.K. households with spiraling energy bills.
Shell posted adjusted earnings of $9.1 billion for the three months through to the end of March. That compared with $3.2 billion over the same period a year earlier and $6.4 billion for the fourth quarter of 2021.
Analysts had expected first-quarter adjusted earnings to come in at $9.1 billion, according to Refinitiv.
The company also announced plans to increase its dividend by around 4% to $0.25 per share for the first quarter of the year.
Shell’s results follow soaring profits seen across the oil and gas industry, even as many energy majors incur costly write-downs from exiting Russia.
U.K. rival BP on Tuesday announced plans to boost share buybacks after first-quarter net profit jumped to its highest level in more than a decade. France’s TotalEnergies, Norway’s Equinor and U.S. oil giants Chevron and Exxon Mobil also reported bumper first-quarter profits on soaring commodity prices.
Shell said in early April that it would write off between $4 billion and $5 billion in the value of its assets after pulling out of Russia. The firm said these charges were not expected to impact adjusted earnings.
Shell reported a sharp upswing in full-year profit in 2021 on rebounding oil and gas prices, with CEO Ben van Beurden hailing it as a “momentous year” for the company.
Shares of Shell have jumped more than 36% year-to-date.
Union groups and environmental campaigners have labeled record profits for U.K. fossil fuel companies as “obscene” at a time when many consumers are grappling with surging energy costs.
Opposition lawmakers have repeatedly called on Prime Minister Boris Johnson’s government to impose higher taxes on oil and gas companies to help struggling families.
Finance Minister Rishi Sunak has suggested such a policy may be possible if oil and gas companies do not properly reinvest profits. Johnson, however, has rejected fresh calls for a windfall tax, saying it will discourage investment and keep oil prices high over the long term.
Meanwhile, the European Union on Wednesday said it plans to ban Russian oil imports within six months and refined products by the end of the year in its latest round of economic sanctions. The bloc’s proposed measures reflect the widespread anger at Russian President Vladimir Putin’s unprovoked onslaught in Ukraine.
Oil prices jumped on the news, adding to these gains on Thursday morning.