Oil firms to reap £11.6bn unexpected wartime profits on UK fossil fuels, Greenpeace projects

‘Oil giants are pocketing mountains of cash off the back of Putin’s war, while millions of UK households are facing fuel poverty,’ Greenpeace UK says

Climate activists have recently been targeting oil depots (AFP via Getty Images)

Fossil fuel companies could get an unexpected £11.6bn in profits from North Seaoil and gas this year mainly due to the invasion of Ukraine, according to new analysis from Greenpeace.

The wartime spike in energy prices is estimated to largely drive a 111 per cent increase in profits for those extracting British fossil fuels, campaigners estimated.

Energy prices were rising even before Russia - a major oil and gas exporter - invaded Ukraine. But costs have gone through the roof since the war was launched in late February.

Greenpeace UK and Oil Change International claimed this would result in a huge boom in profits for companies operating in the North Sea, as they projected estimated windfall profits this year using data from analysts Rystad Energy.

“We found that while the average oil price in 2022 was expected to increase 58 per cent, the projected profit from extracting UK oil and gas would rise on average by 111 per cent,” they said.

“This provides a windfall for the UK oil and gas industry of an estimated £11.6bn, primarily derived from the war’s impact on oil and gas prices.”

The projected free cash flow profits are derived from an increase in the projected average oil and gas price for 2022.

The campaigners found most of those profits - £7.7bn - would go to 10 companies.

BP and Shell were among those that stood to benefit the most, as well as Total Energies and Harbour Energy plc, according to the analysis.

“Oil giants are pocketing mountains of cash off the back of Putin’s war, while millions of UK households are facing fuel poverty,” Charlie Kronick from Greenpeace UK said.

He added: “These companies were in line to cash in on soaring energy prices even before the war, but through absolutely no effort whatsoever their estimated profits have risen to stratospheric levels.”

Greenpeace UK’s climate finance advisor called for a windfall tax on the “bloated profits” to help Britons during the cost-of-living crisis.

Companies named in the piece have been approached for comment.