Shell’s quarterly profit more than doubles as Iran war lifts energy prices
Shell’s adjusted profit more than doubled to $10.8bn in July to September, as the Iran war disrupted energy supplies and raised oil and gas prices. The result beat analysts’ expectations and prompted the company to increase planned shareholder returns, while climate campaigners criticised the windfall.
Shell plans to buy back $5bn of shares over the next three months, up from $3bn in the previous quarter. Refining margins rose to $42 per barrel, compared with $24 in the second quarter, as damage to refineries tightened supply; meanwhile, Shell’s gas output fell by a third from its prewar level of 900,000 barrels of oil equivalent a day.
In short
- Shell’s quarterly profit doubled to $10.8bn.
- Refining margins climbed to $42 per barrel.
- The company plans $5bn in share buybacks.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Higher profits and increased shareholder returns can be defended as the result of Shell meeting demand in a disrupted market and managing its business successfully. Buybacks return capital to investors, including pension funds and savers, while strong earnings can support investment and energy supply during a period of insecurity.
The case against
The windfall reflects shortages and higher prices caused by war, while consumers and businesses bear much of the resulting cost. Critics can argue that directing more money to share buybacks rewards investors rather than easing that burden or accelerating investment in cleaner energy.
Explained simply
Shell is a UK-based energy company that produces and sells oil and natural gas, as well as refining crude oil into fuels. Its profits can rise when energy prices or refining margins increase, though disruptions to production and supply can also affect its business.
Share buybacks are when a company uses money to purchase its own shares, which can return value to shareholders. Higher energy prices can benefit oil and gas producers, while also increasing costs for households and businesses that use fuel.
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Originally published by The Guardian as “Shell profits double to $10.8bn as Iran war pushes up profit margin on oil”.