Results announced by ExxonMobil, Chevron, Shell, BP and the French energy giant Total revealed that the companies collectively reaped just under $60bn over the course of three months. This figure is around three times the equivalent figure for 2021.
Companies are increasingly directing profits towards share buybacks and dividends: Chevron has boosted its annual buyback plans to $10-15bn, up from $5-10bn, while Exxon aims to purchase $30bn in shares during 2022 and 2023. Share buybacks help boost share prices and reduce pressure from investors.
Investment in new oil production, meanwhile, is deemed risky, given the impact of a future recession and climate policies on future fossil fuel demand.
In May, the British government announced a new windfall tax on North Sea oil and gas production that it claimed would raise £5bn to help people struggling with high energy bills. This will have only a marginal impact on the overall corporate profits reported by oil majors, which are drawn from operations around the world.
With annual UK energy bills forecast to exceed £4,200 by January 2023, the Child Poverty Action Group has estimated that more than half of the country's households will enter fuel poverty by the start of next year. Fuel poverty is defined as when more than 10 per cent of household net income is spent on fuel.