LONDON – Shell’s earnings more than doubled in the third quarter, fueling the debate over taxes on energy producers’ windfall profits as they have benefited from high oil and natural gas prices following Russia’s invasion of Ukraine.
Adjusted earnings, which exclude one-time items and fluctuations in the value of inventories, jumped to $9.45 billion from $4.13 billion in the same period last year, Shell said Thursday. The London-based energy giant also announced a $4 billion share buyback and plans to increase its fourth-quarter dividend by 15%.
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“We are delivering robust results at a time of ongoing volatility in global energy market,” Chief Executive Ben van Beurden said in a statement. “At the same time we are working closely with governments and customers to address their short and long-term energy needs.”
Global energy prices soared after the invasion of Ukraine as Western governments imposed sanctions on Russia and the Kremlin curtailed natural gas shipments to Europe, fueling inflation that has spread pain across economies. Brent crude, a benchmark for European oil prices, averaged $100.84 a barrel in the third quarter, 37% higher than a year earlier. Wholesale natural gas prices in Europe more than tripled in the same period.
The U.K., Spain and Italy have already imposed taxes on the windfall profits of energy producers as high oil and gas prices — which have fallen from summer highs — squeeze homes and businesses. The European Union passed such a levy last month.
Britain in May imposed an additional 25% tax on profits earned from oil and gas extraction in the U.K. The temporary tax is designed to raise about 5 billion pounds ($5.8 billion) through the end of 2025. The tax cost Shell $361 million in the third quarter, the company said.
Opposition parties are pressuring Prime Minister Rishi Sunak, who took office this week, to increase the windfall profits tax as he rushes to stabilize Britain’s finances with new tax and spending plans. The government is scheduled to deliver its autumn financial statement to Parliament on Nov. 17.
Rachel Reeves, the opposition Labour Party’s spokeswoman on Treasury issues, renewed that call Thursday.
Despite “booming oil profits,” the government still refuses to impose a “proper windfall tax on energy producers,” she tweeted after Shell reported earnings.