Author: Simon Francis

Oil prices surge as energy industry profits machine runs at full speed

Oil prices have surged past the $120 a barrel barrier and gas futures have started to climb again, as the ongoing blockade of the Strait of Hormuz continues to choke global energy supplies.

The latest market turbulence comes as BP and TotalEnergies this week reported bumper first-quarter profits, with both companies signalling that even larger gains are expected in the months ahead.

A spokesperson for the End Fuel Poverty Coalition commented:

“As oil prices surge, the energy industry’s profit machine is running at full speed.

“BP has reported underlying profits of £2.4 billion in the first quarter of 2026 alone, more than double the same period last year, while TotalEnergies has posted £4 billion in adjusted net income for the same three months.

“The energy industry is waiting for even more gains to come, as rising oil and gas prices feed through into second-quarter earnings.

“What makes this worse is that gas prices, which had shown some signs of easing in recent weeks, are now climbing again. UK gas futures are now 52% higher than this time last year, pushing up the wholesale prices that feed directly into household energy bills. This is not a temporary blip, it is the fossil fuel price rollercoaster in full motion, and millions of households will feel it in their bills.

“The case for Ministers using Windfall Tax revenues to help provide more emergency support for the households on heating oil and those least able to absorb these costs has never been stronger. But we also need to see the Government take faster action on electricity pricing reform to break the grip of gas markets on the bills of every family in the country.”

Fresh profits highlight contrast between industry returns and bills

Scottish Power owners, Iberdrola have reported a rise in profits in the first quarter of 2026, claiming growth is driven substantially by its regulated network operations in the United Kingdom.

The total profits made by the firm in the UK amount to just under £1 billion in the first three months of the year alone, up from £0.8 billion in the first quarter of 2025 – a 19% increase year on year [pdf, p59 & 66].

TotalEnergies, which via its NEO NEXT+ arm calls itself the largest producer on the UK Continental Shelf, has also posted improved results. Adjusted net income (a profit measure) for the firm’s first quarter came in at $5.4 billion (£4bn), up from $4.2bn (£3.1bn) in Q1 last year and it has now launched a share buyback plan and increased dividends for shareholders.

Questions are also being asked about TotalEnergies’ broader role in UK energy supply, including a government gas contract worth up to £8 billion to supply public sector buildings, from Downing Street to schools and hospitals.

The announcements come after BP’s 2026 Q1 results prompted anger among the public. A spokesperson for the End Fuel Poverty commented:

“Another good day for the energy industry means another kick in the teeth for consumers.

“Energy network infrastructure is generating strong and growing returns for shareholders, yet these returns ultimately mean higher bills for households.

“Meanwhile, the consolidation of North Sea assets into ever-larger corporate entities reveals where this industry is heading, companies positioning themselves to extract maximum profit from a dying basin while bills remain high.

“As well as taxing profits to ensure Ministers can provide help to those in fuel poverty, the Government must focus on reforms that will actually bring energy bills down. That means breaking the link between electricity prices and volatile gas markets and accelerating insulation and clean heat programmes.”

BP profits more than double as Iran conflict delivers war windfall

BP has reported underlying profits of $3.2 billion (£2.4 billion) for the first quarter of 2026, more than double the figure from a year earlier, after oil and gas prices surged following the outbreak of conflict in the Middle East.

The result beat analyst expectations and was driven largely by BP’s oil trading division, which posted profits of $2.5 billion (£1.84 billion) for the quarter, up from just $103 million (£76.2 million) a year ago.

New analysis by the End Fuel Poverty Coalition shows that energy firms posted over £23.1 billion in profit from UK operations in 2025, before any Iran conflict windfall had been counted.

A spokesperson for the End Fuel Poverty Coalition said:

“These astronomical profits are a startling reminder that when conflict drives up the price of oil and gas, energy companies profit and households pay. That is not a coincidence, it is a consequence of the way our energy system is structured.

“While the energy industry lobbies against the Energy Profits Levy, we are now seeing the level of profits being posted which shows why it is so necessary.

“Household bills are forecast to surge again from July. The Government must respond with emergency support for the hardest-hit households and accelerate the shift to a renewables-led energy system that insulates people from price shocks caused by our exposure to oil and gas markets.”

Robert Palmer, Uplift deputy director, said:

“It’s appalling that while millions are worrying over energy bills, oil giants like BP are raking in billions.

“Today the oil major has been given a further boost with an unearned windfall because of the Iran conflict. It’s just the first of the bumper profits oil and gas firms will make as this crisis drags on.

“Worse, BP is also rowing back on the very things, like investment in wind energy and solar, that will get us off the fossil fuel rollercoaster. It wants us to stay hooked on oil and gas so it can keep profiting.

“The only sensible way to counter energy shocks is by getting off oil and gas through renewables and upgrading our homes with solar power and heat pumps.

“BP clearly has no commercial interest in transitioning away from fossil fuels – and shows no concern for the public’s need for an affordable energy supply and a safe climate.”

The End Fuel Poverty Coalition has written to Ministers calling for emergency support for the hardest-hit households ahead of the July price cap rise, including those on prepayment meters, off-gas-grid homes relying on heating oil and LPG, and households in energy debt.

Ofgem set to get new powers to fight for consumers

Ministers plan to make major changes to give Ofgem new consumer protection powers.

These include a role for the regulator to enforce consumer law directly, meaning it will no longer need to go through a courts process to make sure customers get what they are owed if companies treat them unfairly.

Reforms to Ofgem’s remit to focus on economic and consumer protection and ensure every energy consumer is protected, including the ability to regulate in new areas of the market, such as heating oil and LPG.

Measures to ensure energy bosses are held accountable, with powers for Ofgem to ban their bonuses if they break the rules.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The Government is right to give Ofgem more teeth, a broader role in regulating businesses across the energy sector and a clearer focus on ensuring the energy market works for consumers.

“Stronger enforcement powers, executive accountability and the ability to step in when the market fails are exactly what campaigners have been calling for. But Ministers must be clear that if the duties placed on Ofgem pull in different directions, vulnerable households must always come first.

“And of course, stronger regulation alone will not pay anyone’s energy bill. As part of the reforms, Ministers must stand ready to direct Ofgem to help bring down bills. This could mean delivering a social tariff for vulnerable customers, recovering excess network profits or tackling gas network ownership, market structures and technical processes that have for too long helped to skew the energy system in favour of energy giants.

“We look forward to working with ministers and officials to ensure that the new arrangements deliver for the millions of people who still cannot afford to heat their homes.”

Heating oil and LPG customers to get additional support to install heat pumps

The Government has announced an increase to the Boiler Upgrade Scheme (BUS) grant for properties heated by oil and LPG. The scheme forms part of the Government’s Warm Homes Plan and provides upfront capital grants to support the installation of heat pumps in homes and non-domestic buildings in England and Wales.

The existing grant currently stands at £7,500 for air source and ground source heat pumps and the increase to £9,000 specifically for oil and LPG properties represents a recognition that these households face higher costs and have greater exposure to global fossil fuel price shocks than those on the gas grid.

The scheme is available to owner-occupiers in England and Wales replacing an existing fossil fuel heating system. The grant is applied by an MCS-certified installer and deducted directly from the installation cost , meaning households do not need to fund the full amount upfront before claiming back.

A spokesperson for the End Fuel Poverty Coalition commented:

“Heating Oil and LPG customers have been among the hardest hit by the current crisis. The three million households relying on these fuels sit outside the energy price cap and have no equivalent protection when global prices spike.

“These households are disproportionately in rural areas, have lower incomes, and live in older, harder-to-upgrade properties.

“A £9,000 grant for these homes will be very welcome, but it may not totally bridge the gap for those who cannot afford the remaining costs or whose homes need substantial preparatory work.

“Therefore, the expansion of this scheme must be accompanied by specialist local advice for households, stronger consumer protections during the works, and targeted additional support for those who cannot meet the shortfall.

“The measure of success is not how many grants are issued, but whether the households most exposed to fossil fuel price shocks are genuinely better off as a result.”

Chancellor raises Windfall Tax levies on electricity generators

The Government has announced it will increase the electricity generator levy (EGL) from 45% to 55%, targeting the excess profits of some nuclear, biomass and renewable generators.

To reduce the exposure to this Windfall Tax, ministers are proposing that these “legacy” generators, which supply around a third of Britain’s power, could move voluntarily onto lower fixed-price contracts to help insulate consumers from volatile global gas prices and bring down bills.

Recent research for the End Fuel Poverty Coalition, found that almost half the public (47%) believe that windfall taxes should actually be extended to more companies within the energy industry. 21% of the public opposed such a move and 32% had no opinion.

A spokesperson for the End Fuel Poverty Coalition, commented:

“For too long, households and businesses have been paying electricity bills linked to and inflated by a gas market they have no control over. This is a structural failure in how our energy system is priced and it has cost households dearly. Raising the levy on generators that pocket windfall profits when bills soar is the right thing to do.

“The carrot and stick approach where energy firms are incentivised to lower prices by moving to new contracts, or face higher taxes, is a sensible one. If these new contracts are properly designed and genuinely deliver for consumers, it could lower prices overall. The critical test is whether households, particularly those least able to pay, actually see the benefit on their bills and by when.

“The Government is right to act, but these measures must be the beginning and not the end of reform. Millions of households are still struggling with bills that are significantly higher than before the start of the energy crisis in 2021. Any revenue raised from the levy increase must be used to support those most exposed to fuel poverty and Ministers must not lose sight of the need for a wider overhaul of how electricity is priced in this country.”

Energy bills due to increase 12% from 1 July

Energy bills are now expected to increase by £196 a year from 1st July.

While the new analyst projections are not as high as first feared, oil and gas wholesale markets remain volatile and households will face steep rises in their bills.

Cornwall Insight said its prediction for Ofgem’s cap from July to September now stands at £1,837 for a typical dual fuel household, an increase of 12% on April’s cap. In April, energy bills fell due to measures taken by the Government in the 2024 Budget.

Meanwhile, around 24 million people are worried about their ability to pay their energy bill over the next six months according to debt charity StepChange as it called for an energy social tariff to help struggling households.

A spokesperson for the End Fuel Poverty Coalition, said:
“The damage from the latest oil and gas price crisis is already baked into price cap predictions. Millions of households in fuel poverty are going to be asked to find more money for energy on top of prices that are already unaffordable.

“Fossil fuel wholesale markets remain volatile, global events continue to dictate what we pay for energy and families already struggling with energy debt have no buffer left to absorb further rises.

“A smaller than planned increase is not relief. It is still an increase that will push more people into crisis and generate higher profits for the oil and gas industry.

“The Government must set out what help is going to be available for households both in the short and long term.”

Two-thirds of households fear for finances as energy bills set to rise

Research carried out for Lightning Reach, has found households suffering widespread financial anxiety, with two-thirds concerned about their finances over the coming months.

Nearly two-fifths said their financial situation had worsened compared with the same point last year. Three in ten had cut back on essentials including food and heating, while a quarter had used savings to cover everyday costs and one in six had borrowed from family or friends.

More than half of those surveyed said they were carrying debt, with 42% reporting that their debt had increased. Global instability has contributed to rising prices and higher mortgage rates, adding further strain to household budgets.

Despite the scale of financial difficulty, a quarter of people said they would not feel comfortable requesting financial support even if their situation required it.​​​​​​​​​​​​​​​​

Meanwhile, energy giant BP has said that it is now set for “exceptional” financial results in the first three months of the year after the Iran war sent the cost of oil soaring.

A spokesperson for the End Fuel Poverty Coalition, commented:
“These figures reflect what households across the country are living through. Cutting back on food and heating is not an abstract financial decision, it is a sign that the energy system based on volatile oil and gas prices is failing people.

“With forecasts pointing to a fresh energy bill rise from July, the pressure on household budgets is only going to intensify. The Government must use the next price cap period as a moment to act. Targeted bill support, action on energy debt and reform of how energy costs are structured would make a real and immediate difference to millions of households.

“And with the public backing the continuation of the Windfall Tax on energy firm profits by a margin of two-to-one, there is also a clear way to pay for this support.”

Iran conflict to cost the typical households £480 each

Rising energy costs triggered by the conflict in Iran are set to leave typical British households nearly £500 worse off this year, according to new analysis from the Resolution Foundation.

The thinktank calculates that the median working-age household, previously on track for modest income growth of 0.9%, could now see income fall by 0.6%, a swing worth around £480. Lower-income households will still see some benefit from the abolition of the two-child limit and above-inflation increases in Universal Credit, but the foundation estimates average income growth for the poorest fifth has been cut from 2.8% to just 1.2% as a result of the conflict.

The Foundation is urging ministers to accelerate work on a social tariff, a targeted support mechanism for lower-income energy users estimated and has the backing of former Conservative chancellor Jeremy Hunt, who estimated it would cost between £5bn and £10bn, but would sit within the Government’s fiscal rules. A Hunt-linked consultancy has previously estimated the Windfall Tax on energy firms could be generating excess revenue for the Treasury.

Meanwhile, Energy UK chief executive Dhara Vyas confirmed to media that a bill rise from 1 July is now inevitable, describing the market as “wildly unpredictable” given daily swings in global gas prices. She backed targeted support and called for accelerated investment in clean power as the only sustainable long-term answer to energy price volatility.​​​​​​​​​​​​​​​​

A spokesperson for the End Fuel Poverty Coalition commented:

“There is broad agreement that targeted support for struggling households is needed while clean power and improved energy efficiency is the long-term solution.

“New polling makes clear that the public understands the urgency of the here and now. Over four in ten people say they simply cannot afford the expected rise in bills this July, with many more worried about the impact of oil and gas prices on energy bills.

“Ministers should set out what support will be available and use the receipts from the Energy Profits Levy to pay for it. This Windfall Tax retains the support of voters and given that two thirds of the public believe energy firms are already profiteering from the Iran conflict, it is no wonder that voters back the Levy by a two-to-one majority.

“The Government should be listening to that public consensus, not to the powerful oil and gas lobbyists calling for the Windfall Tax to be ended just as energy profits are set to spike again.”

Wall Street counts its winnings as UK households suffer

As ordinary households brace for higher energy bills and rising inflation driven by the Iran war, the world’s largest investment firms have watched their stakes in oil and gas companies surge in value. The numbers are staggering.

The Mirror has revealed that BlackRock, the New York-based asset manager, oversees more than £10 trillion in assets on behalf of governments, pension funds, and wealthy individuals. It is also the largest shareholder in Centrica, the owner of British Gas.

Since the Iran war erupted at the end of February, the value of BlackRock’s stake in Centrica has jumped by more than £30 million. Its holdings in Shell have leapt by £860 million. Its BP investments are up £580 million. It also holds stakes in Chevron, ExxonMobil and ConocoPhillips.

It is not just BlackRock. German chemicals giant BASF sold a 5% stake in North Sea producer Harbour Energy in late March, weeks after the war began, netting £36 million more than it would have received before the crisis.

Meanwhile, Harbour Energy chief executive Linda Z Cook has seen her personal shareholding rise by millions.

The knock-on effects for UK households, already navigating a cost of living crisis, will be felt at the petrol pump, on energy bills and through wider inflation.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Behind these share price gains sit a small group of the world’s most powerful investment firms. These are not passive bystanders. They are the financial architecture that keeps oil and gas profits flowing from the pockets of ordinary people into the pockets of those who already have the most.

“That the world’s biggest investment firms will have seen their holdings surge in value as ordinary households face soaring bills will sicken anyone struggling with the economic consequences of Trump’s conflict.

“And it is worth remembering that these firms are also among the most powerful lobbying voices in global financial markets.

“The concentration of energy wealth in the hands of a small number of giant investment firms underlines why a strong windfall tax, with revenues redirected to households, is not just fair, it is essential.

“If the Government is serious about using these revenues to help people struggling with their bills, it must resist the lobbying power of an industry whose backers have rarely had it so good.”