Finance
Shell Warns Australia Against Taxing Lng Windfall Profits
Published by Global Banking & Finance Review®
Posted on March 30, 2026
2 min readLast updated: March 30, 2026
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Shell cautions that a proposed Australian windfall tax on LNG exporters risks deterring investment and undermining energy security amid soaring prices due to the Iran war.
Shell Cautions Australia: LNG Windfall Tax May Harm Energy Sector and Investment
Shell's Warning on Proposed LNG Windfall Tax in Australia
Background: Global LNG Market Disruption
SYDNEY, March 31 (Reuters) - Shell has warned Australia against introducing a windfall tax on gas exporters, saying such a move would deter investment and undermine energy security as LNG prices surge following disruption to global supplies caused by the Iran war.
Australia became the world's second-largest LNG supplier after Iranian strikes forced Qatar to halt production, with its export revenue set to surge due to lower supply caused by the conflict.
Government Considerations and Industry Response
Canberra is reportedly weighing options to capitalise on the higher prices, with Prime Minister Anthony Albanese asking the Treasury department to model a new tax on LNG exports and suggest reforms to the Petroleum Resources Rent Tax (PRRT).
Cecile Wake, chair of Shell Australia, which exports gas from the Queensland Curtis LNG project in the state of Queensland, warned against "short-term fixes" in response to the energy crisis.
"At times like this, there is increased risk that strong and stable policy settings are sidelined by short‑term measures or populist rhetoric," she said in remarks to the Australian Domestic Gas Outlook conference released on Tuesday.
Potential Impact of Proposed Policies
POTENTIAL IMPACT OF PROPOSED POLICIES
The proposed policies would "erode project values and render many of Australia's future growth opportunities uneconomic and uncompetitive compared to global alternatives," she said.
She said high commodity prices "already flow through to Australians through higher corporate income tax and PRRT receipts."
LNG Prices and Export Revenue
Recent Price Trends and Export Growth
Asia spot LNG prices have doubled to three-year highs since the conflict in Iran began in February. Profits earned on long-term contracts linked to oil prices, which make up 75% of Australia's export shipments, are also expected to surge in three to six months.
Australia shipped A$65 billion ($44.5 billion) in LNG exports last year, but gas producers have long been criticised for their low tax payments under rules that let them recoup construction costs before paying tax.
Exchange Rate Information
($1 = 1.4603 Australian dollars)
Reporting Credits
(Reporting by Christine Chen in SydneyEditing by Bernadette Baum)
Key Takeaways
- •Shell warns a windfall tax could erode future LNG projects’ viability and investment attractiveness.
- •Australia’s LNG export revenues have surged as global supplies dwindle following disruptions to Iran and Qatar, benefiting exporters disproportionately.
- •Australia’s government faces criticism for low taxing of gas exports (via PRRT and corporate tax) while exploring new revenue tools including LNG export levies.
Frequently Asked Questions about Shell warns Australia against taxing LNG windfall profits
1Why is Shell warning Australia against a windfall tax on LNG exports?
Shell argues that a windfall tax could deter investment and undermine Australia's energy security by making future projects uneconomic and uncompetitive.
2How has the Iran conflict affected Australia's LNG export revenue?
Disruption of global supply from Iran and Qatar has increased LNG prices, boosting Australia's export revenue as it became the world's second-largest supplier.
3What changes is the Australian government considering for LNG export taxation?
The government is considering imposing a windfall tax on LNG exports and reforming the Petroleum Resources Rent Tax (PRRT) to capitalize on higher prices.
4How have Australians benefited from higher LNG prices according to Shell?
Shell claims higher LNG prices are already reflected in increased corporate income and PRRT tax receipts flowing to Australians.
5What is the value of Australia's recent LNG exports?
Australia exported A$65 billion ($44.5 billion) in LNG last year but has faced criticism for low tax payments by gas producers.
