Shell profit rockets on high oil prices

File photo: The exterior of oil and gas company Shell’s refinery in Pernis, submunicipality of Rotterdam.  (Photo taken on Nov. 15, 2021 by Robin UTRECHT / ANP / AFP) / Netherlands

British energy giant Shell said Thursday that its net profit soared more than five-fold to $18 billion in the second quarter, fueled by resurgent oil and gas prices, and rewarded shareholders with another bumper buyback.

The surge in profits in the three months to June was partially attributable to a reversal of $4.3 billion in impairments after the company raised its forecasts for the gas and oil market.

“We delivered strong financial results,” said chief executive Ben van Beurden alongside the results statement.

The London-listed energy major announced a $6-billion share buyback program, having already returned $8.5 billion to shareholders.

Van Beurden warned also that “with volatile energy markets, economic turbulence and the ongoing need for action to tackle climate change, 2022 continues to present challenges to consumers, to government, and to companies”.

Shell had rebounded into a $3.4-billion profit in second quarter of 2021 from a $18.1-billion loss in the same period of 2020 when it took a massive impairment charge on the COVID-ravaged oil market.

However, oil and gas prices have soared this year owing to the Ukraine war and after countries lifted pandemic lockdowns.

Gas prices, which sky-rocketed in March after Russia launched its invasion of Ukraine, are soaring once more this week after Moscow curbed crucial deliveries to Europe in recent days.

The world’s energy majors are reaping the benefits of this year’s surge in global oil and gas prices as a result of the war in Ukraine.

France’s TotalEnergies said Thursday that net profit more than doubled in the second quarter to 5.7 billion euros ($5.8 billion) from a year earlier.

“The energy sector continues to ride high on the supply and demand imbalance caused by the crisis in Ukraine,” said Laura Hoy, equity analyst at Hargreaves Lansdown.

The Ukraine war has meanwhile sparked an exodus of Western energy companies from Russia.

Earlier this year, Shell logged a first-quarter profit of $7.1 billion, despite taking a $3.9-billion charge on its withdrawal from Russian activities.