Oil Companies Seeing Record Profits Amid Global Turmoil

While motorists pay ridiculous prices at the gas pump, Shell rakes in record profits. Should oil companies be ridiculed for trying to maximize profits or is this just good business?
Written by Andrew Kidd
Reviewed by Kathleen Flear
Updated on May 18, 2022
Surprising absolutely no one, oil companies like Shell have seen record profits in a time when many
car and truck owners
are draining their bank accounts at the
gas pump
According to
The New York Times
, Shell reported a record $9.1 billion profit in the first quarter thanks mostly to the rising cost of energy and the company’s own cost-cutting efforts. It’s the highest-ever quarterly profit in the company’s history. Similarly, BP reported its highest profit in a decade.
It also comes at a time of global turmoil, where the
war in Ukraine
and the tightening global energy market have caused the price of oil and natural gas to skyrocket. Shell was recently criticized for purchasing a shipment of Russian oil products just weeks after its invasion of Ukraine and has since agreed to sell its
Russian assets
Demand for fuel has also increased as more commuters return to the road and to their pre-pandemic workplaces.

Are oil companies taking advantage of global chaos?

Naturally, Shell, one of the largest multinational corporations in the world, used the opportunity to state that its record profits indicate the importance of a strong fossil fuel industry despite growing pressure to transition to renewable energy and, for consumers, electrified vehicles.
"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,” said Shell CEO Ben van Beurden in a
prepared statement
. “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.”
As NYT reports, Shell used market volatility to make profits in trades, while also cutting its costs during the pandemic, which improved its prices once pricing and sales increased.

Are oil companies really investing in green energy?

Van Beurden told journalists on a call that the company’s profits could possibly be funneled toward clean energy efforts. The company is currently working on some hydrogen projects that aren’t without their own controversy.
The auto industry, on the other hand, is signaling a clear shift toward electrification based on
consumer demand
and legislative pressure. That would put a decent dent in the oil market, of which passenger vehicles consume a little over one quarter of the oil used worldwide.
But it’s unlikely that oil companies will feel that hurt too quickly, as many automakers have committed (for now) to electrify their entire lineups within a couple of decades as legislators work to ban
new gas car sales
in some states.
But again, it’s lip service—both Shell’s green energy investments and the auto industry’s commitment to electrification—until they have something to show for it.

Hurting at the pump? Think about going electric

If you’re hurting at the pump and Shell’s record profits don’t comfort you, there’s plenty of incentive to buy an electric vehicle. Many automakers are offering multiple options that are more attractive and more affordable than the compliance cars of yesteryear, while other
automakers are going all-in on electric vehicles from the
But if buying a new
electric vehicle
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