il giant Shell has announced a huge jump in profits amid growing calls for a windfall tax on oil and gas giants.
Royal Dutch Shell reported underlying profits of $9.1 billion (£7.2 billion) in the first quarter, up 43% on the final three months of 2021 thanks to soaring oil and gas prices.
The huge profits are likely to reignite calls for a windfall tax on energy giants. A one-off tax on BP and Shell alone could raise £9 billion for the Treasury, the Liberal Democrats estimate.
The bumper profit comes days after rival BP announced a huge jump in earnings to $6.2 billion. Both have been boosted by soaring oil and gasp rices in the wake of Russia’s invasion of Ukraine. Brent crude has risen from around $79 a barrel at the start of the year to $111.
Shell CEO Ben van Beurden said: “The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted.
“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”
Shell’s adjusted earnings were up from $3.2 billion in the same period last year and $6.4 billion in the final quarter of 2021. First quarter profits beat City forecasts of $8.6 billion.
The oil giant returned $5.4 billion to investors in the first three months of the year and said it would spend another $4.5 billion buying up its own shares in the coming months. It promised more dividends and buybacks in the second half of the year.
Van Beurden said: “Today’s results… give us the confidence to plan future shareholder distributions and disciplined investments that will accelerate our strategy.”
Soaring profits have led to calls for a windfall tax on oil majors, with the proceeds used to help families cope with soaring energy bills and the cost of living crisis.
The government has so far resisted these calls, arguing a one-off tax would deter companies from investing.
Headline profits dropped by 38% due to a $3.9 billion paper loss from the company’s Russian operations.
Shell previously announced plans to exit investment in Russia in response to the war in Ukraine and last month said the decision would cost it around $5 billion in accounting charges.
The company has also pledged to stop buying Russian oil. However, last week it was accused by Ukraine of using an “acccouting trick” to bankroll “Putin’s war machine” by purchasing blended oil products that include some Russia oil. Shell has denied the charge.