Shell profit soars as Middle East war disrupts energy supplies
The British energy giant said its net profit more than doubled to US$12.1 billion in the third quarter as the war sent oil and gas prices soaring.
British energy corporation Shell reported a substantial increase in its net profit, soaring to US$12.1 billion in the third quarter, more than double its profit from the same period last year. The soaring oil and gas prices, driven by the ongoing Middle East conflict, significantly contributed to this surge in profit. Shell's chief executive, Wael Sawan, attributed the strong results to the company's unwavering focus on operational performance in the face of persistent global energy system disruptions.
Revenue for the quarter reached an impressive US$92.8 billion, a substantial jump from US$68.2 billion in the corresponding period last year. Shell's refining margins, which measure the gap between crude oil prices and the prices of refined products, hit a record high in the quarter, a direct result of the global supply disruption caused by the Middle East and Ukraine wars.
The production and export of refined products in the Middle East have been severely hampered since the war began in late February, leading to a widening gap between crude oil and refined product prices. Meanwhile, Ukraine's drone attacks on Russian energy infrastructure have forced Russia to ban the export of certain products, notably gasoline and diesel, further exacerbating the supply crunch.
This has allowed refineries not affected by the conflict to capitalize on the tightening global supply of refined products, resulting in profit margins of US$42 per barrel, a notable increase from US$24 per barrel in April to June. In response to these robust financials, Shell has announced plans to increase its share buyback program to US$5 billion.
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