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Receding Russia-Ukraine war hampers Oil industry profits

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Western oil and gas majors, including ExxonMobil, Chevron, Shell, TotalEnergies, Equinor, Eni, and BP, are expected to face renewed scrutiny of their energy transition plans as the commodity crisis triggered by the war in Ukraine recedes. A drop in second-quarter earnings of about 50 percent compared to the record levels set in the same period last year has been reported by each of these companies. The invasion of Ukraine in February 2022 resulted in soaring oil and gas prices, leading to record profits in the industry. However, as concerns around energy security diminish and profits normalize, the focus is likely to shift back to the decarbonization plans of these companies.

Eni’s CEO, Claudio Descalzi, believes that the boom fueled by Russia’s actions has come to an end. Descalzi stated that the rebound in demand in late 2021 followed by the disruption caused by the war had led to these exceptional results. However, he does not expect these levels to be sustained. With the immediate concerns around energy security subsiding, Descalzi anticipates that investors and policymakers will refocus on decarbonization plans.

Despite the upheaval of the past 18 months, Eni and BP have maintained their focus on energy transition plans. Eni aims to increase the proportion of gas in its production and expand renewable power projects. BP, on the other hand, has slowed its retreat from oil and gas production and intends to increase spending on its “transition” businesses, such as biofuels, convenience, charging, renewables, and hydrogen.

Shell, under its new CEO Wael Sawan, has made noticeable changes in its approach. Sawan has pledged to allocate a higher proportion of spending to oil and gas and be more selective about clean energy projects. (

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