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JPMorgan Sees Big Oil Holding Back Investment on EU Windfall Tax

  • Oil majors may return more cash to shareholders, not invest
  • Europe is grappling with the worst energy crisis in decades

A new energy windfall tax in the European Union may give oil majors a reason to spurn investment in favor of returning record profits to shareholders, according to JPMorgan Chase & Co. 

The tax is part of a raft of measures proposed by the EU to funnel profits from the energy industry to alleviate the burden of high prices driven by Russia’s restriction of natural gas supplies. The proposal could create uncertainty that deters companies such as Shell Plc, TotalEnergies SE and BP Plc from spending on new production, according to Christyan Malek, the bank’s global head of energy strategy.