London Daily

Focus on the big picture.
Sunday, Aug 24, 2025

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
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
×