The recovery from the Corona low and the Ukraine war have caused oil prices to rise sharply. The main beneficiaries of this are the energy companies in Europe. They can multiply their profits while consumers dig deep into their pockets.
The rise in oil prices as a result of the Ukraine war and the expired corona restrictions have brought energy companies billions in profits. Shell, Repsol and Totalenergies report record profits and can increase the previous year's values many times over.
French group Total earned more in the second quarter thanks to higher prices and its refining business. Profits rose 158 percent to $5.7 billion despite a writedown on a stake in a Russian gas producer. A year ago it was 2.2 billion. Adjusted for special effects, earnings climbed to a record $9.8 billion.
Shell posted adjusted earnings of $11.5 billion. That is more than twice as much as a year earlier. The British group was able to offset lower results in liquid gas trading with higher prices and refinery profit margins as well as better results in gas and electricity trading. The bottom line is that the company earned $18 billion, five times the previous year's figure. Compared to the first quarter, it was more than twice as much. At that time, the withdrawal from the Russian business had depressed the result.
The till also rang at Repsol. In the first half of the year, the group from Madrid made a net profit of more than 2.5 billion euros. That was a good twice as much as a year earlier. Almost half came from the book value of stocks that Repsol holds as a strategic reserve for Spain.
The German energy group RWE has also sharply raised its profit forecast for the current year due to good business in the first half of the year. The company expects earnings before interest, taxes, depreciation and amortization of five to 5.5 billion euros instead of the previous 3.6 to four billion euros. RWE referred to an "extraordinarily good result" in power generation from water, biomass and gas and a "strong performance" in energy trading.
The figures from the corporations are likely to rekindle the debate about taxing the high profits made as a result of the war. In Germany, SPD leader Saskia Esken recently called for such an excess profit tax.
In Spain, the government has announced such a tax on energy companies' war-related profits for the coming year. The government wants to take in around two billion euros in 2023 and 2024. She wants to use the money to finance relief packages for the citizens. The trade associations criticize that the tax reduces the investment budget of the corporations.
