Shell has become the latest energy giant to report a significant jump in profits, following a sharp increase in oil prices since the escalation of geopolitical tensions in the Middle East. The company reported profits of $6.92bn (\u00a35.1bn)<\/b> for the first three months of the year, exceeding analysts’ expectations and up from $5.58bn in the same period a year earlier.<\/p>\n
The price of oil has soared since the escalation of hostilities in the region, leading to the effective closure of the key Strait of Hormuz. This vital waterway typically carries about 20% of global oil and liquid natural gas (LNG) supplies. Last week, rival oil giant BP announced that its profits for the first three months of the year had more than doubled. Other oil firms have also reported bumper results; Norway’s Equinor, for instance, reported profits of $9.77bn<\/b> in the first quarter, its highest quarterly profit in three years.<\/p>\nTraders Benefit from Market Volatility<\/h3>\n
Shell chief executive Wael Sawan commented, “Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets. The safety of our people remains our priority as we work closely with governments and customers to address their energy needs.”<\/p>\n
Similar to BP, a key factor behind Shell’s profit surge was improved performance in its oil trading business. Before the conflict began, Brent crude, the global benchmark for oil prices, was around $73 a barrel<\/b>. Since then, oil prices have experienced sharp swings, peaking above $120 at one point, but also falling below $100 on other occasions amidst speculation about the reopening of the Strait of Hormuz. These significant price movements have widened the gap between buying and selling prices, typically enabling traders to secure larger profits. Shell’s profits were further boosted by higher margins in its refining business, which converts crude oil into finished products like petrol and jet fuel.<\/p>\n
However, the company noted a 4% drop<\/b> in its oil and gas output compared with the final three months of last year, attributing this to the conflict. Shell’s LNG production in Qatar has been halted since early March due to the conflict, and its Pearl GTL site in Qatar has sustained damage from attacks. Last week, Shell announced its acquisition of Canadian shale producer ARC Resources for $16.4bn<\/b>, a move Sawan believes will “deliver value for decades to come.”<\/p>\nCalls to Strengthen Windfall Tax<\/h3>\n
The surge in profits reported by energy firms has drawn criticism from environmental groups. Danny Gross, a climate campaigner at Friends of the Earth, stated, “Once again, fossil fuel giants are pocketing monstrous profits while drivers are being squeezed at the petrol pump and households are set to pay higher energy bills. The answer is clear: strengthen the windfall tax on these indefensible profits and break our dependence on fossil fuels by powering our economy with homegrown renewables.”<\/p>\n
Energy firms operating in the UK are subject to the Energy Profits Levy, a windfall tax introduced in 2022 in response to soaring profits following Russia’s full-scale invasion of Ukraine. This levy was extended by Labour until March 2030. However, it only applies to profits generated from extracting oil and gas within the UK, while the majority of energy giants’ earnings originate overseas. The UK accounts for less than 5% of Shell’s global oil and gas production.<\/p>\n
Gas and electricity bills for most UK households are currently protected by an energy price cap. Until June 30, the typical annual bill for dual-fuel households paying by direct debit will be \u00a31,641<\/b>. However, the jump in wholesale oil and gas prices since the regional conflict began means the cap is estimated to rise by approximately \u00a3200<\/b> when it is revised in July.<\/p>\n
Vincent Clerc, from Maersk, mentioned that the sharp rise in energy prices is adding half a billion dollars of extra costs per month to the business. He emphasized the importance of passing these cost increases to customers to protect margins and operational integrity, while acknowledging uncertainty about potential inflation and lower demand. Maersk’s latest earnings showed operating profits slightly above analysts’ forecasts, largely for the period just before the regional conflict escalated.<\/p>\n
On Monday, Maersk reported that its US-flagged vessel, the Alliance Fairfax, which had been stranded in the Gulf since late February, successfully exited the Strait of Hormuz, accompanied by US military assets. Clerc noted that Tehran’s ambition for control of the Strait and eventual toll charges would be a significant industry change, comparable to the Suez and Panama canals, but considered any current toll charges “very, very speculative” until the Strait reopens.<\/p>\n
#OilProfits #EnergyMarket #Geopolitics #StraitOfHormuz #BP #Shell #OilPrices #WindfallTax #EnergySecurity #GlobalEconomy #MiddleEastConflict<\/p>\n","protected":false},"excerpt":{"rendered":"
Shell has become the latest energy giant to report a significant jump in profits, following a sharp increase in oil prices since the escalation of geopolitical tensions in the Middle East. The company reported profits of $6.92bn (\u00a35.1bn) for the first three months of the year, exceeding analysts’ expectations and up from $5.58bn in the […]<\/p>\n","protected":false},"author":1,"featured_media":7574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-7573","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-iran_news"],"_links":{"self":[{"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/posts\/7573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vanak.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7573"}],"version-history":[{"count":0,"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/posts\/7573\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vanak.news\/index.php?rest_route=\/wp\/v2\/media\/7574"}],"wp:attachment":[{"href":"https:\/\/vanak.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vanak.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vanak.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}