War profits judged indecent: TotalEnergies quarterly profit increase under criticism from NGOs and the left

Driven by rising energy prices linked to the war in the Middle East, the French giant shows significantly increased profits over the past year. A performance that reignites the debate on the taxation of exceptional profits.

The results are sparking renewed debate. TotalEnergies reported a very strong profit increase for the first quarter, amidst the Middle East war. The quarterly profit of the French oil and gas giant totals $5.8 billion (4.96 billion euros), a 51% year-over-year increase. CEO Patrick Pouyanné underlined “its ability to capture the price hike”, in a statement released on Wednesday. Earlier in April, the Financial Times revealed that TotalEnergies had earned over a billion dollars in gains by purchasing almost all exportable oil cargoes from the Middle East, bypassing the Strait of Hormuz.

This context of war, energy market tensions, and soaring profits fuels accusations of “war profiteer” against TotalEnergies from many left-wing politicians. Energy expert Philippe Charlez believes this view needs nuance. “We can at least rejoice, in France, in keeping one of the top five global oil companies,” he noted, highlighting the company’s low debt. He also emphasized that the industrial strategy of lowering production costs is “acknowledged.”

However, not everyone is convinced by this industrial logic. Greenpeace France denounced the “cynical logic” of oil giants, accusing them of turning human tragedies into financial opportunities while households bear the brunt at the pump. According to the NGO, TotalEnergies, as at the start of the war in Ukraine in 2022, is taking advantage of geopolitical instability to maximize its profits, to the point of generating “war profits” deemed “indecent.” Olivier Guérin from Reclaim Finance advocated for taxing the company’s windfall profits and breaking free from fossil fuel dependence and TotalEnergies.

In response, the government’s spokesperson and Energy Minister, Maud Bregeon, stated that the executive does not “rule out anything” in principle. Prime Minister Sébastien Lecornu called on TotalEnergies to “redistribute in one way or another” their possible “exceptional” profits while acknowledging a need for objective debate. TotalEnergies, in turn, explained that they already redistribute their profits to consumers through fuel price capping, in effect since February 2023.

Some energy experts temper their criticisms towards the oil giant. Guillaume Lagane from Sciences Po highlighted the competitiveness of the market where TotalEnergies operates and the broader use of profits beyond shareholder returns for investment. While amidst the Middle East crisis, he pointed out that business operates within the framework of capitalism and economy, stressing that the values of decency or morality are not the primary drivers.

Former president of the French Union of Petroleum Industries, Jean-Louis Schilansky, stressed the need to contextualize TotalEnergies’ position. Despite recurring criticisms during results releases, he explained that the company represents only 1.5% of global oil production in 2024, far behind Aramco or ExxonMobil. In an industry where a consistently “less efficient company eventually disappears or is acquired,” he suggested comparing the results of the French group to those of direct competitors.