Western oil and gas companies are expected to encounter renewed scrutiny of their energy transition plans as the unusually high profits from the war in Ukraine begin to wane, news media Financial Times posits.

LAst week, Exxonmobil, Chevron, Shell, Totalenergies, Equinor, and Eni all reported declines in earnings for the second quarter of 2023 of around 50% compared to the record-high earnings the companies experienced in the second quarter of last year.

Russia’s invasion of Ukraine in February 2022 sent oil and gas prices skyrocketing and shifted the West’s focus from the sustainable transformation of energy companies to energy security. The five major oil and gas companies — Exxon, Chevron, Shell, Totalenergies, and BP — earned a combined USD 238bn in the five quarters from January 2022 to March 2023, according to the Financial Times.

The CEO of Italian energy company Eni, Claudio Descalzi, told the newspaper that a return to 2022 earnings levels is unlikely and that the focus of investors and politicians will once again turn to the efforts of oil and gas companies in the energy transition.

There is a big difference between US and European oil and gas companies’ investments in renewable energy. According to Pavel Molchanov, an analyst at investment bank Raymond James, renewable energy investment accounts for 30% of European energy companies’ total capital expenditure while it accounts for less than 10% for their US counterparts.

(Translated using DeepL with additional editing by Christian Radich Hoffman)