Shell's second-quarter profit more than doubled to $9.84bn as the Iran war pushed oil and gas prices higher. Trading desks captured the swings in Brent crude, while the company's integrated gas division reported a 30% drop in production after a strike on its Qatari LNG assets.
Shell's profit for the April-to-June period reached $9.84bn (£7.37bn), up from $4.26bn at the same point last year, after the Iran war pushed up oil prices.
Together with the $6.92bn it earned in the first three months of the year, that leaves first-half earnings 70% higher. Chief executive Wael Sawan said the company's operational performance enabled very strong results during "another quarter of severe disruption in global energy markets".
Hormuz disruption swings the oil price
The price of oil has soared since the outbreak of the US-Israel war with Iran, because of major disruption to global supplies of oil and liquid natural gas through the Strait of Hormuz.
Before the conflict began, Brent crude, the global benchmark, sat at around $73 a barrel. It has since peaked above $120 but also fallen back below $100 as speculation has swirled over when the Strait of Hormuz will reopen. The Guardian reported Brent traded at $93.18 a barrel on Thursday.
Trading desks turn volatility into profit
Those big movements in the oil price can widen the gap between buying and selling prices — the bid-ask spread — which typically enables traders to make bigger profits.
Shell is not alone. Other energy giants including BP and Norway's Equinor have also seen bumper profits this year, partly down to trading on oil price swings.
Gas output drops after the Qatar strike
Against that, Shell reported a 30% drop in production from its integrated gas division on the same quarter last year. The fall follows a strike that damaged its assets at the Ras Laffan liquefied natural gas complex in Qatar in March, and repairs to the plant are expected to take about a year.
The surging profits reignited calls from environmental campaigners for taxes to fund support for the households hardest hit by the rise in energy costs. Greenpeace political campaigner Rudy Schulkind called on the government to implement a windfall tax on big oil companies.
Sources: BBC News, The Guardian
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