City forecast: BP and Shell to face pressure as profits set to soar

The UK’s two biggest listed oil companies will face an odd dilemma this week as they present what is likely to be their best set of results for years while facing calls to cough up more in tax.

The businesses are predicted to report a combined $13 billion (£10.5bn) in profit from the first three months of the financial year, a massive hike from the same time in 2021.

BP is forecast to on Tuesday report $4.5bn in replacement cost profit, while according to a company-compiled consensus of analyst estimates, Shell expects to on Thursday report adjusted earnings of $8.7bn.

A lot of this will come from the cash households are paying to keep the lights on, heat their homes, and fill up their cars. It will likely spark renewed calls for a windfall tax on the companies – an idea already backed by Labour.

Earlier this week, Chancellor Rishi Sunak appeared to distance himself from such a tax but did not entirely rule it out. "It sounds appealing. 'Great, we're taxing bad energy companies more, that will solve all our problems'," he said in an interview with Mumsnet.

"The reason we haven't gone down that road is, really simply… we need to invest more. That's why we haven't gone for some extra tax. Because what I don't want to do is discourage investment in our own energy supplies.

"But what I'd say is, look, if we don't see that type of investment coming forward and if the companies are not going to make those investments in our country and in our energy security, then, of course that's something I would look at."