Shell profit doubles to $9.8bn amid Middle East energy market disruption
Europe’s largest oil and gas company has more than doubled its second-quarter net profit to $9.8bn, leveraging extreme market volatility and surging crude prices to offset severe production disruptions.
Shell reported a net profit of $9.8bn for the three months to June, more than doubling its earnings from the same period last year. The result marks the second-highest quarterly profit in the company’s history, trailing only the record set following the invasion of Ukraine.
The surge was driven by severe disruptions in global energy markets following the US-Israeli attacks on Iran in late February. Brent crude climbed from roughly $61 a barrel in January to $126 in April after Iran blockaded the Strait of Hormuz, though it has since settled near $90. Shell’s trading desk capitalized on this extreme volatility, generating $2.3bn in its chemicals and products division.
These trading gains offset a 30% year-on-year drop in gas production after Iranian drones damaged Shell’s gas-to-liquids facility in Qatar. Consequently, earnings in the liquified natural gas business still grew 55% to $2.7bn, buoyed by elevated global prices. Chief executive Wael Sawan highlighted the company's trading strength, noting it allows the firm to navigate difficult periods.
The earnings release precedes a scheduled meeting between Sawan and Britain’s new prime minister, Andy Burnham. Sawan indicated he will urge the government to back North Sea projects, including the Jackdaw gasfield. He noted that the UK is the company's base and they will offer support to the government.
“The biggest thing that can be done at the moment is to continue to support the development of the North Sea, to continue to invest in renewables,” Sawan said. He emphasized that the UK is the company's home and they will offer any support possible to the government as they navigate these difficult waters.
The windfall contrasts with the outlook at rival BP, which warned staff of potential oversupply and lower future prices. BP’s production boss, Gordon Birrell, announced 700 further job cuts to streamline operations following 7,000 reductions last year. Birrell stated the company must remain “competitive at the bottom of the cycle, not just the top.”
The financial results have drawn sharp criticism from environmental groups over the climate impact. Robert Palmer, deputy director at the campaign group Uplift, accused the company of “maniacal behaviour” for “putting its profits ahead of the health of our planet”.
“As families and firefighters across Europe battle devastating wildfires, Shell is cashing in on Trump’s war and doubling down on oil and gas,” Palmer said. The campaign group opposes further North Sea development and condemned the company's strategy.
Greenpeace political campaigner Rudy Schulkind said the group was “running out of words to describe the obscenity” of the profits amid extreme weather across Europe and Asia. He urged the government to implement a windfall tax on major oil companies to fund household energy support and accelerate the transition to clean power.
