European energy companies are raking in record profits - as sky-high bills squeeze their customers' wallets

Major energy companies are raking in record-breaking profits because of soaring gas prices.

Royal Dutch Shell and Centrica reported record-breaking profits this week.

British Gas owner Centrica earned 1.3 billion pounds in the third quarter, up from a year ago.

The two firms achieved historic results due to soaring oil and gas prices. Since the beginning of June, Dutch TTF natural gas futures have risen by 112%, while benchmark crude and oil prices have gone up.

Simon Tucker said that Centrica and Shell have performed very strongly again this quarter, with earnings resulting in an $11.5 billion profit, a new record for Shell. We are currently in a commodities super cycle with supply limited and demand high, and this is likely to continue for the next three to five years.

Around 40% of the region's gas needs are supplied by Russia, which has caused prices for natural gas, coal and power to surge this year. EU sanctions on Moscow over the war in Ukraine have resulted in the closing of key sources of energy supply, which has driven inflation to multi-year highs, but has also brought windfalls to fuel providers.

British energy companies have seen their profits go up.

After a strong second quarter, Norwegian firm Equinor paid out an additional $3 billion to shareholders, while France's Total saw its adjusted income triple.

Europe's energy crisis is likely to last until at least 25 years, according to strategists at Goldman.

In a recent research note, a team led by the bank's head of natural gas research said that they expected European gas prices to go up again in the summer of 2023. We don't think there will be a sustained lower-price environment in Europe until 25 years from now.

As consumers struggle with soaring fuel costs, the record-breaking profits come as a pleasant surprise.

The firm warned this week that UK households could see their fuel bills rise to just under 3,500 pounds by the end of 2022.

Analysts called for the oil and gas firms to invest their high profits in order to boost supply.

Tucker said that every effort could be made to reduce energy use. The clean-up of bad industry practices like flaring and spillage of oil will open up significant waste reduction potential.

6 energy stocks all offer upside as inflation soars, and oil approaches $100 per barrel.