London Daily

Focus on the big picture.
Sunday, Apr 05, 2026

Oil and gas companies are looking at a bonanza from the Ukraine war

Oil and gas companies are looking at a bonanza from the Ukraine war

Analysis: fear of shortages gives fossil fuel companies leverage with governments that could be disastrous for the climate

Oil and gas companies are facing a potential bonanza from the Ukraine war, though few in the industry want to admit it, and many are using soaring prices and the fear of fuel shortages to cement their position with governments in ways that could have disastrous impacts on the climate crisis.

“There is a huge opportunity for oil and gas companies, though I’m sure it is not one they would have chosen,” said Robert Buckley, head of relationship development at Cornwall Insight, an energy analysis company. “They have the opportunity to reposition themselves [as crucial to policymakers]. There is going to be a very high price for oil for a very long time, and even the prospect of physical shortages.”

Oil prices have leapt dramatically, to more than $130 a barrel, sending petrol prices in the UK to more than 155p a litre, while gas prices have also surged.

Luke Sussams, of Jefferies investment bank, said: “The high-price environment is likely to last a long time. Boris Johnson has said that alongside the accelerated deployment of renewables will be greater production from the North Sea. There is the potential for growth prospects and upside [for fossil fuel producers].”

The EU, the UK and the US have all announced drastic restrictions on imports of oil and gas from Russia, which will affect the EU most as about 40% of EU gas comes from Russia, but will hurt all countries as prices are set internationally. Those governments are now urgently seeking ways to protect their energy security, through ramping up renewables and seeking alternative sources of oil and gas supply.

Opec, and Saudi Arabia in particular, are the obvious ports of call, but have been so far been reluctant to commit to increased production. This could change, as the FT reported that the United Arab Emirates’ ambassador to the US favoured an increase, news which sent oil prices down about 11% from their peak.

But the crisis gives western oil and gas companies such as BP, Shell, Exxon and Total leverage among governments. In the UK, prime minister Boris Johnson defended oil companies against calls for a windfall tax on Wednesday from Labour. He said: “The net result of that would be to simply see the oil companies put their prices up yet higher and make it more difficult for them to do what we need them to do … divesting from dependence on Russian oil and gas.”

Robin Baillie, partner in the energy group at the international law firm Crowell and Moring, said: “Governments around the world are looking for short-term solutions to finding an alternative to Russian energy, and the North Sea is an obvious one for the UK, until such time as more renewables come online.”

New oil and gas fields take years and even decades to come into production, so even if companies begin to expand their exploration immediately it will not reduce current prices. Big oil and gas companies are now awash with cash, which they could use to invest in pumping more from existing fields, and exploring new fields.

Green campaigners warned that oil and gas companies were using the Ukraine emergency to further their own interests, by encouraging governments to prioritise oil and gas production and make decisions now on investments that would have little impact on the current crisis but would vastly increase fossil fuel use for years to come.

Marc van Baal, of Follow This, a group of 8,000 green shareholders in oil and gas companies, said: “The leaders of oil and gas companies really have shown in the last years that they want to hold on to their old business model. This is what they understand – turning hydrocarbons into petro-dollars. So I am afraid this is what they are telling governments they should do.”

Tessa Khan, director of Uplift, which campaigns to end North Sea fossil fuels, said: “It’s shameful that oil and gas companies, some of whom have profited from their Russian partnerships for years, now seek to use this humanitarian crisis to further their interests. The fact that they are still being listened to by governments, the UK’s included, is beyond belief.”

A stark reminder of the likely consequences of further dependence on oil and gas came from the International Energy Agency, which reported on Tuesday that greenhouse gas emissions had shown the highest ever annual increase in 2021. The global energy watchdog found that energy-related carbon dioxide emissions, which make up the bulk of greenhouse gases, had risen by 6% in 2021 to 36.3bn tonnes, their highest-ever level, as the global economy rebounded from the Covid-19 pandemic, relying heavily on coal to power the growth. The increase in global CO2 emissions was more than 2bn tonnes, the largest in history in absolute terms, outweighing the decline in emissions seen during the lockdowns of 2020.

Renewable energy and energy efficiency offer alternatives to oil and gas, which the UK, the EU and the US are also pursuing. But if fossil fuel companies make decisions now to expand exploration and production, that will continue to result in high emissions for years and decades to come.

Lori Lodes, executive director of Climate Power, a campaigning group in the US, said: “More drilling in more places isn’t a short-term fix, it’s a long-term problem that only makes oil and gas CEOs richer and locks us into more dependence on dirty, unreliable, expensive and volatile fossil fuels.”

Newsletter

Related Articles

0:00
0:00
Close
UK Food Halls Defy Hospitality Slowdown, Emerging as Bright Spot in Challenging Market
UK Sets Firm Conditions for Military Action, Insisting on Legal Mandate and Clear Strategy
UK Medicines Regulator Launches Probe into Peptide Clinics Over Health Claims
New North Sea Drilling Unlikely to Significantly Cut UK Gas Imports, Analysis Finds
Woman Linked to UK’s First All-Female Terror Plot Faces Deportation
Downed US Aircraft Over Iran Linked to Operations from UK Airfield
Two Men and Teen Detained in UK Following Attack on Jewish Charity Ambulance
UK Police Launch Inquiry After Firearms Left Unattended Outside Mayor’s Residence
Giuffre Family Calls on King Charles to Meet Epstein Survivors During US Visit
Amber Wind Warning Issued as Storm Dave Approaches Parts of the United Kingdom
Prince Harry and Meghan’s Australia Visit Set to Draw Heightened Global Attention
UK Considers Entry Fees for Overseas Visitors at Major Museums Ahead of 2026 Travel Season
UK Prime Minister and Kuwait Crown Prince Coordinate Security Response After Regional Escalation
Calls Grow to Expand Fully Paid Maternity Leave for UK Teachers Amid Workforce Pressures
UK Secures Tariff-Free Access to US Market in Landmark Pharmaceuticals Agreement
Trump Projects Strength in Critique of UK Leadership and Naval Readiness
UK FinTech Setback as VibePay and Smartlayer Cease Operations Amid Funding Pressures
UK Leads Global Coalition of Over Forty Nations to Address Strait of Hormuz Crisis
UK Firms Urged to Accelerate Preparation as New Sustainability Reporting Rules Take Shape
UK Moves Rapid Sentry Air Defence System to Kuwait After Drone Strike Escalation
Transatlantic Relations Tested as UK Seeks Balance While Trump Reshapes Strategic Approach
Trump’s Strategic Pressure on UK Seen as Push for Stronger Alignment and Fairer Terms
UK Focuses on Trade Finance to Secure Critical Materials for Defence and Energy Sectors
Majority of UK Businesses Hit by Middle East Conflict While Confidence Holds Firm
UK Royal Navy Faces Renewed Scrutiny as Debate Intensifies Over Capability and Readiness
Reform UK Faces Mounting Distractions as Policy Agenda Struggles to Gain Traction
Investigation Launched Into Northern Cyprus IVF Clinics After UK Families Receive Incorrect Sperm
International Meeting Issues Unified Call to Safeguard Navigation Through Strait of Hormuz
Potential Strait of Hormuz Closure Raises Concerns Over UK Food and Medicine Supply Chains
UK Leads Coalition of Over Forty Nations Urging Iran to Reopen Strait of Hormuz
UK Secures Tariff-Free Access for Medicines in Landmark US Pharma Trade Agreement
King Charles III Invited to Address Joint Session of U.S. Congress in Rare Diplomatic Honor
Debate Grows Over Whether Expanded North Sea Drilling Can Reduce UK Energy Bills
UK Faces Heightened Risk of Jet Fuel Shortages, Airline Chief Warns
UK Ends Police Investigations into Lawful Social Media Posts After Review Finds Overreach
Abramovich Moves to Establish Charity for Frozen Chelsea Sale Proceeds Amid UK Dispute
Starmer Reaffirms NATO Commitment While Responding to Trump’s Strategic Critique
UK Aid Reductions Raise Fears of Severe Human Impact Across Parts of Africa
UK Signals Renewed Push for EU Cooperation as Iran Conflict Reshapes Security Landscape
Bank of England Signals Caution as Bailey Advises Markets Against Expecting Rate Hikes
UK to Convene Global Coalition to Restore Shipping Through Strait of Hormuz
Trump Signals Possible NATO Reassessment, Emphasizes Stronger U.S. Strategic Autonomy
Australia Joins British-Led Efforts to Reopen Strait of Hormuz Amid Escalating Tensions
King Charles Plans US State Visit as UK Strengthens Ties with Trump Leadership
UK Regulator Launches Investigation Into Microsoft’s Business Software Practices
Kanye West Set for High-Profile Return to UK Stage at Wireless Festival
Trump Presses Europe to Strengthen Commitment as Iran Conflict Escalates
UK to Deploy Additional Troops to Middle East Amid Rising Regional Tensions
UK Authorities Face Claims of Heavy-Handed Measures in Monitoring Released Pro-Palestine Activists
Trump Calls on UK to Secure Its Own Energy as Iran Conflict Intensifies
×