Bumper shareholder payouts, soaring profits, booming asset valuations: the oil and gas industry has bounced back from the depths of the pandemic with a vengeance.

After a difficult 2020, when plunging demand led in some cases to negative prices, crude recovered in 2021 and wholesale gas prices have soared in Europe and the UK. Gas has risen as much as tenfold to new all-time highs, due to factors including low storage capacity, strong Chinese demand and low wind generation during the summer.

BP boss Bernard Looney said recently illustrated this bonanza when he said the oil and gas giant has become a “cash machine”. North Sea oil and gas companies are expected to report near-record cashflows of almost $20bn (£14.9bn) for the current financial year, according to industry experts at Wood MacKenzie.

The revival of the industry’s fortunes has spurred calls for a windfall tax on North Sea producers, with the proceeds used to subsidise energy bills for households facing a cost-of-living crisis. The Liberal Democrats first made the call last week, and Labour also took up the call at the weekend. Rachel Reeves, shadow chancellor of the exchequer, said: “There is a global gas price crisis, but 10 years of the Conservatives’ failed energy policy, and dither and delay, has created a price crisis that’s being felt by everyone. We want to stop bills going up.”

The Conservative former energy minister Chris Skidmore has also publicly backed the idea, which has been rejected by the government.

Shell, the world’s largest producer and trader of liquefied natural gas (LNG), said last week that profits would be higher than expected thanks to high prices.

Unlike gas that arrives via pipelines from fields in the North Sea, LNG is shipped across oceans to the highest bidder, meaning companies like Shell benefit from surging global prices.

Falling oil prices could be a decider in the coming general election, lifting the spirits of car drivers and pushing to one side thoughts of endless Osborne austerity.

What looked like a flash crash in the oil market is turning into a longer term depression that will delight businesses and households in every major economy.

Not only does it have the capacity to cut the cost in the UK of petrol, heating oil and the price per therm of gas, which tends to track the oil price, the falling price of crude does everything a chancellor might want – except promote climate change policies.

A report by Opec forecasting that demand for oil will fall next year and a separate study showing US stockpiles growing were the trigger for another round of selling on the oil markets on Wednesday, driving prices down further. The cost of a barrel of Brent crude has already fallen by 40% since the summer and the outlook for next year means it will keep heading south for some time.