Oil giant Shell posted a staggering US$6.9 billion in first quarter earnings while drivers across the US cop record fuel prices at the bowser.
Shell’s Q1 numbers represent a massive leap from the previous quarter, where the company posted US$3.3 billion in adjusted earnings. That’s more than double in the space of three months, and the timing could not look worse for the energy giant.
The national average price of a gallon of gasoline in the US has hit US$4.56, up from US$3.15 just a year ago. Diesel is sitting only 14 cents below its all-time record of US$5.82. Ordinary motorists are getting absolutely hammered, and the optics of Shell’s windfall quarter are about as ugly as you’d expect.
CEO Wael Sawan pointed to what he called “unprecedented disruption in global energy markets,” a diplomatic way of referencing the war in Iran that kicked off on February 28. That conflict sent oil prices surging almost overnight and they haven’t come back down. Around 20% of Shell’s gas and oil production sits in the Middle East, and while their Oman assets remain operational, the broader regional picture is messy.
None of that stopped the company from announcing a US$3 billion share buyback program and a 5% dividend increase, pushing shareholder payouts to US$0.39 per share. Investors, weirdly enough, weren’t thrilled. Shell’s stock dropped 3.39% on the day of the announcement. Apparently doubling your profits wasn’t enough to impress Wall Street.
The public reaction was considerably less restrained. Greenpeace UK showed up at Shell’s London headquarters with a projector, splashing the building with accusations of war profiteering. The environmental group argued Shell’s profits had doubled since the start of hostilities in Iran, and that the company was raking in billions while thousands died and household energy bills went through the roof.
Greenpeace called on governments to tax Shell’s windfall profits and redirect the money to families struggling with the cost-of-living crisis. It’s a familiar demand that picks up volume every time energy companies post eye-watering quarterly results, and this round is no different.
There is some nuance worth noting. The Iran conflict didn’t begin until late February, meaning it only affected roughly one month of the first quarter. Oil prices did spike fast, but attributing the entire earnings surge to the war oversimplifies what happened. Shell’s upstream operations, refining margins, and LNG trading all contributed to the result.
Still, the core tension is hard to ignore. When fuel companies post record or near-record profits during the same period consumers are paying record or near-record prices, the “war profiteer” label is going to stick regardless of what the spreadsheets actually say.
For drivers in the US and globally, the practical reality hasn’t changed. Fuel is expensive, it’s getting more expensive, and the companies selling it to you are doing just fine. Whether governments step in with windfall taxes or let the market sort itself out will likely depend on how long prices stay this high, and how loud the backlash gets.
