Oil giant Shell this week reported a $6.2 billion profit for the third quarter, in line with estimates, as the company received a boost from higher oil prices and refining margins.
Profit was higher than the $5.1 billion in the second quarter, but marked a sharp decline from the $9.45 billion reported a year ago when the Russia-Ukraine war led to inflated oil and gas prices. London-listed shares of Shell were 1.1% higher at 8:30 a.m. on Thursday.
Shell also announced a $3.5 billion share buyback to be carried out over the next three months. Energy majors are coming off the back of a record year for profits, which was fuelled by soaring fossil fuel prices.
Despite strong overall performance, some areas of the company struggled. Shell’s renewables and energy solutions division reported a $67 million loss, which it blamed on softer margins due to seasonal effects and lower trading.
The results come amid criticism over the pace of the company’s decarbonization program, including from groups of its own shareholders. However, the company is expected to ignore this and focus on making the most of high oil prices to take advantage of a fragile geopolitical environment.
What does this mean for me?
Oil prices have again risen sharply, through the third quarter of 2023, on the back of factors including Saudi Arabian and Russian supply cuts, while the International Energy Agency has said oil markets will remain on edge amid the escalation in conflict in the Middle East.