Shell reveals better-than-expected 70 per cent surge in half-year earnings
Shell has revealed a better-than-expected 70 per cent surge in half-year earnings thanks to its best quarterly performance for fours years, despite “severe disruption” in oil and gas markets due to the Iran war.
The FTSE 100 giant saw underlying earnings jump to $16.75bn (£12.55bn) after notching up a forecast-beating $9.84bn (£7.37bn) in the three months to the end of June as its oil traders capitalised on the highly volatile cost of crude.
The second quarter result was more than double the $4.26bn dollars (£3.19bn) posted a year earlier and up sharply on $6.92bn (£5.18bn) the previous quarter.
The group said underlying earnings at its chemicals and products unit – including its oil trading business – jumped to $2.88bn (£2.15bn), up significantly from $118m (£141m) a year ago.
This helped offset falling gas production, which tumbled by 31 per cent due to an Iranian attack on its Qatar gas-to-liquids plant at the start of the Middle East conflict.
Chief executive Wael Sawan said: “Shell’s operational performance enabled very strong results during another quarter of severe disruption in global energy markets, as we worked hard to provide critical energy supplies and products to our customers.”
Shell has profited from trading on oil price swings, with the cost of Brent crude surging as high as 120 dollars a barrel at one stage before dropping to pre-war levels and back up past 90 dollars this week amid fraught negotiations between the US and Iran.
Its oil trading division had already seen earnings more than quadruple year on year in the first quarter.
But Shell’s Pearl GTL site in Qatar stopped production in March after being hit during attacks while LNG facilities in the country partly owned by Shell were also affected.
While its Pearl site has not been able to produce gas since the missile attack, production has been boosted group-wide thanks to a strong performance at other facilities globally.
Shell expects to take a year repairing the damaged Pearl site and getting it back up and running. The group said it was making sure its oil refineries were working at full capacity, with record utilisation of 102 per cent, with global refining jet volumes up 20 per cent compared with a year earlier.
Friends of the Earth criticised Shell’s bumper profit haul.
Danny Gross, the group’s energy campaigner, said: “With extreme heatwaves and wildfires hitting the UK and ravaging Europe, it’s outrageous that Shell is making huge profits while continuing to fuel the climate crisis.
“These profits have been built on an energy crisis that’s left households across the country struggling with high energy bills at home and expensive fuel at the pumps.
Mr Gross added: “This underlines the urgent need to end our dependence on costly oil and gas.”