Shell, the oil and gas behemoth, has reported robust profits for the third quarter, fueled largely by the rebound in oil prices. The company declared earnings of $6.2bn (£5.1bn) from July to September, marking a significant increase from the previous quarter. However, this figure is a drop from the $9.4bn during the same timeframe last year when the oil and gas prices soared following Russia’s invasion of Ukraine.
Current oil prices are notably lower than they were during that period. Their recent ascension is attributed primarily to the Opec+ consortium of oil-producing nations’ decision to decrease production, thereby lending support to the market. Notably, the World Bank has raised concerns that the ongoing Middle Eastern conflict might elevate crude oil prices to as much as $150 a barrel, a stark rise from the present $85.
Shell’s recent quarterly earnings indicate a 23% surge compared to the preceding quarter. This growth is attributed to the uptick in oil prices, increased oil and gas production, and augmented revenue from refining and gas trading activities. While oil prices experienced a surge in 2022, they had receded earlier this year, impacting the profitability of energy companies. The tide turned favorably for them after production cuts during the summer.
The decision to reduce production was primarily influenced by Opec+ members, spearheaded by Saudi Arabia and Russia. These cuts were instituted due to apprehensions regarding a global demand slump, coupled with Moscow pointing fingers at the West for ‘tampering with market dynamics’. This referred explicitly to the imposed cap on Russian oil post its Ukraine invasion.
Such market fluctuations have already pushed petrol prices upward, burdening consumers at fuel stations.
Post its impressive quarterly results, Shell unveiled its intention to repurchase shares worth $3.5bn. Overall, the company plans to reward its shareholders with returns totaling $23bn this year.
