Why are Shell’s profits so high?

Oil giant reveals underlying earnings tripled at start of this year

Shell has announced its profits for the start of this year have nearly tripled (AFP via Getty Images)

Shell is enjoying soaring profits. Its latest results - published on Thursday - show record earnings for the start of the year.

Despite a multi-billion pound hit from cutting Russian ties, the oil giant saw its earnings triple to $9.1bn (£7.3bn) in the first few months of 2022.

But is Shell seeing, in its own words, such “strong results in volatile times”?

The profits may not be despite volatile times, but instead because of it.

Right in the middle of Q1, when the record results are for, Russia invaded Ukraine to start a war now in its 11th week.

Oil and gas prices had already been soaring before this as the world started to bounce back from the Covid pandemic, which had bought many parts of it to a standstill.

But ever since the major exporter decided to invade neighbouring Ukraine, energy prices have gone through the roof.

This has been affected by uncertainty over supplies from Russia, as well as western sanctions against Moscow.

Just this week, oil prices surged after the European Union announced plans to ban all Russian imports.

Other oil and gas giants are also reaping the benefits of higher prices. Earlier this week, BP recorded its highest underlying profits for more than a decade.

Analysis from Greenpeace has estimated fossil fuel companies operating in the North Sea could get an unexpected £11.6bn in profits this year as the Ukraine war sends prices soaring.