Easing energy prices failed to cool profits at Shell during the first three months of this year as the FTSE 100 company posted record profits thanks to reduced operating costs and a boost from its trading operations.

In its best-ever set of first quarter results the oil giant reported adjusted earnings of $9.6 billion (£7.6bn), more than $1.6bn greater than forecast and $500 million more than in the same period last year. However, earnings were down slightly from $9.8bn in the fourth quarter of 2022 - when Shell reported a record annual profit of $40bn - as oil and gas prices slid back from last year's peaks.

The bumper figures further fuelled accusations of "profiteering" by the oil and gas majors amid the ongoing inflation crisis, with Shell confirming that it will return another $4bn in excess cash to shareholders in the coming three months. It was a similar story earlier this week when profits at BP likewise came in ahead of expectations, reigniting calls from environmental groups and politicians for a bigger windfall tax on the oil and gas sector.

READ MORE: Oil giant BP sees £8 billion wiped from stock market worth

Last year, the UK government introduced the Energy Profits Levy to help fund public support for families as energy bills skyrocketed.

The windfall levy was initially set at 25 per cent, on top of the headline tax rate of 40%, but rose to 35% at the beginning of this year. However, it includes a loophole that allows businesses to offset the tax by investing in oil and gas extraction in the North Sea.

In spite of this sweetener, energy firms have claimed that an even bigger windfall tax will discourage investment in the UK.

Harbour Energy recently announced that it would cut 350 positions, mainly in Aberdeen, after annual profits were "all but wiped out" by the windfall tax. In February, Enquest said it had deferred drilling on the Kraken field amid concerns over the levy.

READ MORE: Record results at Shell prompt accusations of "profiteering"

Shell has nine operated assets in the North Sea, but generates the majority of its revenues from elsewhere in the world where the UK's profit levy does not apply. Shell’s UK tax bill reached $134m last year and the group expects to pay more than $500m this year after the levy increased in January.

The group announced last month that operations had resumed at its Pierce feild in the UK Central North Sea following a major upgrade that brought gas production on stream alongside the oil that has been extracted from the site since 1999.

Peak production at the field is expected to reach 30,000 barrels of oil equivalent per day, which is more than twice that prior to redevelopment. The majority of this will be gas.

Pierce is a joint venture between industry major Shell, which has a 92.5% stake, and Israeli-backed Ithaca Energy which owns the rest. Ithaca, which has interests in a number of other North Sea assets including the controversial Cambo oil field, has also warned of “significant fiscal instability” created by the windfall tax.

READ MORE: Is Ithaca Energy right about windfall tax?

Lower natural gas prices weighed on Shell's giant integrated gas business during the first quarter of this year, with profits slumping 18% to $4.9bn. But this was broadly offset by a 139% surge in chemicals manufacturing and refined products, where profits reached $1.8bn in part because of lower feedstock and utility costs.

Shell, the world's top trader in liquified natural gas, said LNG production rose in the quarter thanks to higher uptime at its Prelude floating facility off the coast of Australia.

"In Q1, Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility," chief executive Wael Sawan said in a statement.

The company will pay a quarterly dividend at $0.2875 per share, the same as in the fourth quarter of 2022 and up from $0.25 in the same period a year earlier. The shares closed yesterday's trading in London 20p higher at 2,345.5p each.