Shell and BP are expected to suffer a drop in profits of more than 40 percent after a drop in gas and oil prices.
The London-listed oil companies, which will soon announce their results, earned around £31 billion in 2023, according to Refinitiv forecasts.
This pales in contrast to 2022, when they raked in £55 billion after energy prices soared following Russia’s invasion of Ukraine.
Slump: Shell and BP are expected to suffer a profit drop of more than 40 percent
The spike caused a sharp increase in inflation and was a major contributor to the cost of living crisis.
In 2022, the average price of Brent oil was around $100 (£78) per barrel, but fell to $82 last year.
The drop in profits could impact the companies’ ability to return additional cash to investors through share buybacks.
They were keen on aggressive share buyback programs after making historic cuts to their dividends during the Covid pandemic.
Shell will announce its annual figures on Thursday. It is expected to have earned £20.3 billion by 2023. By 2023, BP is expected to have earned £11 billion. The company will report on February 6.