Beautiful Virgin Islands

Tuesday, Dec 09, 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

Beautiful Virgin Islands
0:00
0:00
Close
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
The Disregard for a Europe ‘in Danger of Erasure,’ the Shift Toward Russia: Trump’s Strategic Policy Document
Two and a Half Weeks After the Major Outage: A Cloudflare Malfunction Brings Down Multiple Sites
UK data-regulator demands urgent clarity on racial bias in police facial-recognition systems
Labour Uses Biscuits to Explain UK Debt — MPs Lean Into Social Media to Reach New Audiences
German President Lays Wreath at Coventry as UK-Germany Reaffirm Unity Against Russia’s Threat
UK Inquiry Finds Putin ‘Morally Responsible’ for 2018 Novichok Death — London Imposes Broad Sanctions on GRU
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
UK Budget’s New EV Mileage Tax Undercuts Case for Plug-In Hybrids
UK Government Launches National Inquiry into ‘Grooming Gangs’ After US Warning and Rising Public Outcry
Taylor Swift Extends U.K. Chart Reign as ‘The Fate of Ophelia’ Hits Six Weeks at No. 1
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
UK to Raise Online Betting Taxes by £1.1 Billion Under New Budget — Firms Warn of Fallout
Lamine Yamal? The ‘Heir to Messi’ Lost to Barcelona — and the Kingdom Is in a Frenzy
Warner Music Group Drops Suit Against Suno, Launches Licensed AI-Music Deal
HP to Cut up to 6,000 Jobs Globally as It Ramps Up AI Integration
×