Big oil making $30m an hour from Iran war - The Latest

0:00This is The Guardian.

0:30I get the job done. No bills in sight. What a life. Do right by yourself and your business and search Xero for your free trial. Conditions apply.

0:46Oil and gas business is the most lucrative industry in the history of humanity. $30 million an hour. Imagine what you could do with that. Russian companies could make about 20 billion. And so you can imagine this has been very good for Vladimir Putin. But the only way to kind of solve this problem once and for all is to transition away from fossil fuels to renewable energy. Fossil fuel giants have been raking in tens of millions every hour since the start of the Iran war, with climate action blockers like Saudi Arabia and Russia the biggest beneficiaries. From The Guardians today in Focus, this is the latest with me, Lucy Hoff.

1:23Damien Carrington, thanks for dialing in. You are our environmental editor who's been looking into the massive, mind-boggling profits that are being made by oil giants during this time of war, at a time where we on the show have been talking for some weeks now about the impact on consumers, people already feeling the pinch, worried about another cost of living crisis, seeing rising petrol prices, etc. Tell me about what you've found. Hi Lucy, thanks for having me. So what we found in the analysis that was done for The Guardian is that the top 100 oil and gas companies in the world in March made about$30 million an hour, according to the best estimates we have.

2:05$30 million an hour? Yeah,$30 million an hour. Imagine what you could do with that. So this is important to say that it is unearned profit. This is like windfall profit. They didn't do anything different. It's just the war put up the price and therefore they benefited. And also importantly to remember is that it comes from you and me and everybody else who pays the bill. So if you've filled up a car recently and gone, oh, my God, that was 150 quid. Yeah, that money is going straight off to these big oil and gas companies. If the oil price stays about$100 a barrel, which it has done since the start of the war through to the end of the year, then these 100 companies look set to make$234 billion in total in the year, which is actually about the entire GDP of Portugal.

2:46God, it blows the mind, these types of sums. And who are the big winners, in inverted commas, of this war profit, if we can call it that? Because in your reporting, it's oil and gas companies based in places like Russia and Saudi, right? Absolutely. There's a whole range of oil and gas companies. One thing to remember is that this business is already insanely profitable. So the oil and gas business has made about one trillion in profits every year for the last half century. So what we're talking about here is on top of that. Not a struggling industry, we can say. No, I mean, it's the most lucrative industry in the history of humanity.

3:22You know, perhaps tech's starting to kind of take that crown. And that's also why the fossil fuel industry has been so powerful for that reason. But in terms of, you know, as you say, the so-called winners, Saudi Aramco, the state-owned Saudi Arabian oil company, is the biggest. And that's because it's the biggest oil producer in the world. So it looks set to get an additional$25 billion windfall by the end of the year. ExxonMobil, another very big company, about$11 billion by the end of the year if the price is $100. And as you mentioned, some Russian companies, there's three of them between them, could make about$20 billion.

3:55Of course, these Russian companies are very important in terms of funding the war in Ukraine. So through March, other analysis has found that oil revenue from these Russian companies is about$700 million a day. So you can imagine this has been very good for Vladimir Putin, sad to say. The other point just to make is that all of these people, you know, Saudi, Russia, Exxon, various others, are all organisations or countries that have been very opposed to climate action, which of course is caused by the very fossil fuels that they produce. Yeah, that point about Russia making such a profit at a time when it's involved in this war with Ukraine is really alarming.

4:34I mean, those enormous sums of millions, billions, potentially by the end of the year. good news for Vladimir Putin and bad news for Europe and Ukraine of course. And you touched on your first answer but people are already noticing enormous price rises. There are real concerns about rising energy costs towards the end of the year particularly as we enter the colder winter months. Governments of course will be looking at ways to mitigate against that to help people with their energy bills. But this is ultimately creating a situation where therefore consumers individually and governments are potentially lining the pockets of these oil giants and oligarch nations?

5:15No, they absolutely are. And as you know, the cost of living has been a big problem for many people around the world. In the UK where we're based, that's certainly been the case. And having these additional prices for filling up your car or paying your home energy bill, even going shopping, Interest rates are going to go up because of the economic impact. We've seen other problems around the world, so in Europe, fuel prices are going up. In America, they're talking about$4 a gallon gas, as they call it, which is politically problematic there. Asia seems to be really problematic in the sense that they are really reliant on oil and gas that's come out of the Gulf.

5:55So, I mean, they're having to take some even more extreme measures. In Sri Lanka, for example, they're doing a four-day working week and also rationing fuel in Vietnam. They're telling people to work from home. Food is also going to be a big problem that comes out of this because fertilizer is a huge supply that comes out of the Gulf. People are worried about Africa in particular there. So in the context of all of this, the idea of these big companies and petro-states absolutely coining it in is a tough one to take. Yeah, we had a really fascinating conversation with our Southeast Asia correspondent, Rebecca Ratcliffe, about the view from Southeast Asia and effectively what would sound almost like COVID type situations with people being asked to work from home and offices turning off air conditioning in obviously very hot countries, fuel rations, as you say.

6:45Meanwhile, I mean, Europe has been for some time, particularly since the start of the Iran war, looking at a windfall tax on oil and gas companies. It's something that Rishi Sunak did off the back of the Ukraine war a few years ago. Is that something that governments are really seriously looking at? And obviously your reporting will bring greater urgency to that call. Yeah, there's definitely a lot of pressure for it. So in the case of the EU, they had a windfall tax and they're looking to revive that. So some of the big powers in EU, like Germany, are now pressuring the Commission to revisit that and it looks like they're getting some traction.

7:23In the UK, the windfall taxes remained and kind of remarkably some on the right of politics had recently been arguing about abolishing the windfall tax, presumably to somehow kind of invest immoral in gas, but that seems politically problematic now given the enormous profits that are taking place. Yeah, and since the start of the war, much of the sort of discourse here has been about the UK's self-sufficiency, and that should be about tapping into the oil and gas reserves in the North Sea. But that's still fossil fuels, and surely this makes the strongest possible argument for the clean transition to renewable energies.

8:01Well, I'm glad you've asked me this, Lucy, because I think it is just a massive red herring and sideshow to be talking about the oil and gas drilling in the North Sea. And the reason for that is that it's an exhaustive basin pretty much. And any new oil and gas, even if you did do it, would be marginal a few percent in terms of our gas supply. And of course, it just perpetuates not just the super profits that we've been talking about, but also our reliance on gas. You know, I mean, yesterday the IMF was saying that the UK was going to be the hardest hit economically of all the G7 countries. That's because of our reliance on gas.

8:34The only way to get off this roller coaster of volatile oil and gas prices is to move to green energy. And the government in the UK has been doing that and has actually saved consumers billions already just with the rollout that we've got of wind and solar. But the only way to kind of solve this problem once and for all is to transition away from fossil fuels to renewable energy. Absolutely. Well, Damien, thank you so much and thank you for your reporting. Thank you. that's it for today my huge thanks again to damien carrington the guardian's environment editor do read his exclusive reporting on this story over at theguardian.com we'll also put a link in our show notes i'd also really recommend listening to our sister podcast science weekly which is looking at another commodity beyond oil and gas which is also stranded in the strait of helium ian sample will be exploring why helium is so essential to areas like mri machines ai and even deep sea diving?

9:30And what will happen if the shortage continues? That's it for today. Thanks for listening to this episode of the latest, the new evening edition of Today in Focus. Today in Focus will be back in your feeds as usual tomorrow morning. The latest will be back tomorrow night. This episode was presented by me, Lucy Hoff. It was produced by Bryony Moore. The senior producer was Ryan Ramgobin. The lead producer was Zoe Hitch.

9:57This is The Guardian.

10:22For 100 years, we've been taking cases to trial and winning record verdicts. I'm Cliff Horowitz, a third-generation trial lawyer. Let me do for you what our family has been doing for 100 years, getting you the full justice you deserve.