Outrage as oil giants profit billions from Iran war – The Latest
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What are the profits of Shell since the Iran war began?
This is The Guardian.
It does feel like these major profits are going to the big oil companies and people like you and I are having to foot the bill.
And a lot of rich shareholders are getting substantially richer as consumers are paying more.
There's no getting away from the fact that an oil company makes more money when oil prices are high. For a lot of people, it is entirely obvious the way forward should be more green energy.
Europe's biggest oil and gas company Shell has raked in nearly $7 billion in profits since the Iran war started, reigniting calls for tougher windfall taxes and support for consumers. From The Guardian's Today In Focus, this is The Latest with me, Lucy Hough. I'm joined by Gillian Ambrose, our energy correspondent. Gillian, since the start of this conflict, we've been talking about the impact on oil prices, which over the weekend soared to nearly $120 a barrel, which is astronomical. Meanwhile, we have had an exclusive report from our colleague Damon Carrington last month about the amount of money that oil giants are making from this conflict, $30 million an hour. Today, we've had the profits from Shell, an unbelievable $6.9 billion since the start of the war, which has exceeded expectations.
I'm just a bit confused by all of this because, you know, we're hearing about the disruption in the Strait of Hormuz, these stuck oil ships, that productivity is slightly down. So why these huge profits given the disruption?
I think there has been some disruption to oil companies. It's easy to believe that they're having an easy ride and really enjoying this crisis.
How have rising oil prices impacted consumer costs?
But I think we have seen Shell, for example, one of its major gas plants in Qatar has been damaged quite severely by a drone attack. That's going to cost hundreds of millions to repair, possibly take over a year. So their production for the year is actually, for the quarter rather, is down by about 4%. But the scale of the increases in the oil price that we've seen in the last few months is more than enough to offset that kind of dip in production. So that's why we're seeing these better than expected profits from these companies. A lot of it also comes down to the oil traders. They're able to make the best of a bad situation, I suppose.
Yes, because it's not just Shell. BP also reported profits of $3.2 billion for the last quarter, which is double what it made for a similar period in the last year. I'm sorry to have a bit of a moan here, but I filled up my car on the weekend for the first time since the start of the Iran war. Normally it's 50 quid to fill up my full tank and it was £75. I'm not alone in that. And I'm talking about a very bashed up, very small polo here. But it just feels outrageous that these prices are being passed on to consumers.
I think you've really hit the nail on the head there.
What factors contribute to Shell's record profits despite disruptions?
There's a lot of outrage because it does feel like these major profits are going to the big oil companies and people like you and I are having to foot the bill. So there's people across the country having exactly the same experience at the petrol pumps at the moment. We have an electric vehicle, which is great. But, you know, even if you do, it's not enough to protect you from these price rises because so much of what we buy depends on the transport fuels that get products from A to B. So those costs will be filtering through for everybody, whether you've got a bashed up Polo or an EV.
Yes, and also if you're planning to take a flight because jet fuel has doubled in price. There's been huge numbers of flights cancelled this week and people feeling very uncertain about what that means for their summer holidays as we approach that time of year.
Absolutely. I think the jet fuel prices are really where we see the crisis manifesting for Europe particularly. Those prices have climbed a lot more than the market price for oil. So we are seeing that in airlines, we're seeing that in cut flights. And I hate to say it, but I think that is something that we're going to see through the summer.
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Chapters
8 chapters
1
What are the profits of Shell since the Iran war began?
0:00–1:48
2
How have rising oil prices impacted consumer costs?
1:48–2:59
3
What factors contribute to Shell's record profits despite disruptions?
2:59–4:30
4
What are the implications of windfall taxes on oil companies?
4:30–5:44
5
How are consumers reacting to skyrocketing fuel prices?
5:44–7:03
6
What role do jet fuel prices play in the current energy crisis?
7:03–8:15
7
How are oil companies using their profits amid rising costs?
8:15–9:32
8
What are the political implications of the energy crisis for the government?
9:32–11:58