Britain’s oil giants are finally recovering – if Miliband will let them

Matthew LynnSun, May 10, 2026 at 10:00 AM UTC

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A congratulatory tweet from the Chancellor perhaps? Or a grateful acknowledgement of the contribution they make to the economy from the minister charged with regulating them?

You might think that when two of Britain’s biggest and most globally significant companies finally come back from years in the doldrums and start reporting better results, the Government might offer some encouragement.

Unfortunately not, however. With BP and Shell finally firing on at least one cylinder again, all they are met with is abuse and threats of a windfall tax – but that is the last thing the country needs if we are ever to achieve energy security.

The third and 10th largest British companies, respectively, Shell and BP, are finally witnessing a long overdue upturn in their fortunes. This week, Shell reported adjusted earnings of $6.9bn (£5bn) for the first three months of the year, more than double what it made in the previous quarter and 23pc up on the same period last year.

Likewise, BP is making steady progress back from the green abyss its previous management led it to. Under Meg O’Neill, its new chief executive, it announced profits of $3.8bn for January to March, compared with $687m for the same period last year, while “underlying” profits more than doubled.

In both cases, the oil giants are clearly starting to do a lot better, and their share prices are reflecting that. BP’s shares are up by 51pc over the last year, while Shell, which was always in far better shape to start with, is up by 28pc.

It is not hard to work out why they are doing so much better. Sure, the surge in the oil price triggered by the war in Iran has certainly helped.

But both giants have started to shift their focus back from renewable energy to what they were always good at: finding oil and gas in the ground, then working out how to extract it and get it to the market efficiently.

BP has sold off green assets, including wind farms in the US, and this month sold its stakes in carbon capture projects in the UK. And Shell has moved back into fracking with the acquisition of Canada’s ARC Resources for C$22bn (£12bn).

Who knows, perhaps it might even be allowed to develop the massive reserves of shale oil here in Britain one day.

It is hardly very complex. It was always a mistake to bet so heavily on renewables. But it is already paying off for both companies.

Ministers should be celebrating that. But no. In a notorious tweet that he subsequently deleted – an admission of guilt if ever there was one – Ed Miliband, the Energy Secretary, argued that BP’s results were shocking.

Ed Miliband condemned BP for making billions of pounds while households face higher energy bills - Thomas Krych/Anadolu via Getty Images

“Profiting from a crisis is morally and economically wrong,” he wrote. “That’s why we are taxing these windfall profits.”

On Shell’s results, at least Miliband decided to stay silent, although he was probably fuming about them in private. But the environmental campaigner Chris Packham accused it of “profiting from illegal wars and burning up our one and only home”.

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The message was clear. Increased profits from two of Britain’s largest global companies were merely confirmation of how evil they are, and should be taxed away before they can do any more harm.

Seriously? There are two big problems with the argument that the oil giants are profiteering from the energy crisis.

To start with, oil prices go up and down all the time. They have soared on the war in Iran, but before that, they had been well below average for the last year.

With the UAE leaving Opec, the cartel of producers that attempts to control the price of oil, and Venezuela, with the largest proven reserves in the world, about to start rebuilding its industry under American guidance, the price is likely to come down again sharply during the next few years.

Those windfall profits won’t be around for very long. Are we going to start handing back that windfall if they are losing money in a couple of years from now? Of course not.

In reality, companies should be allowed to manage their own finances, without the Government constantly deciding to confiscate any extra cash they might make when the market is doing well.

Next, we need them more than ever for our energy security. The Iran war should have made it abundantly clear, even to ideological green warriors, that Britain would be in a far better position if it developed more of its own energy resources instead of relying on renewables backed up by expensive foreign imports.

At some point, we will have to start rebuilding the North Sea, and perhaps developing shale oil as well.

Who better to lead that effort than BP and Shell? They have the expertise and the capital that we will need if we are ever to achieve energy security.

But if we demonise them and tax away any profits that they might have managed to make, that won’t be possible.

In reality, the Chancellor and the Prime Minister, assuming they cling to office after catastrophic local election results, must hold the line against fresh windfall taxes on the oil giants, no matter how much the Left of their party might press for it.

And they need to rein in the constant criticism of the oil giants. If anything, they should be figuring out how they can help them fight their way back to leadership of the global energy industry.

The British economy can’t hope to start growing again if we keep punishing companies simply because they are successful, or taxing away any money they manage to make.

That surely applies to BP and Shell as much as it does to any other sector of the economy.

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Source: “AOL Money”