As a result of Russia’s invasion of Ukraine, energy prices skyrocketed a year ago, sending global inflation to its highest levels in decades.
Oil and gas prices declined in the first half, resulting in a decline in net profits for Shell and other major energy companies.
As a result of Russia’s invasion of Ukraine, energy prices skyrocketed a year ago, sending global inflation to its highest levels in decades.
Since then, gas and crude prices have decreased but remain elevated, prolonging the cost-of-living crisis.
On Thursday, the British oil behemoth Shell reported that its profit after taxes for the second quarter was $3.13 billion, down 80 percent from the same period last year.
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“Despite lower commodity prices, Shell delivered strong operational performance and cash flows in the second quarter,” said CEO Wael Sawan in an earnings statement.
Despite the decline in profits—which was also a result of lower gas sales—Shell declared that it would return $3 billion to shareholders.
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industrywide declines
Elsewhere On Thursday, the French company TotalEnergies reported that its second-quarter net profit fell 28 percent to $4.1 billion compared to the same period last year.
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“In a favorable but softening oil and gas environment, TotalEnergies once again delivered robust results, strong cash flow, and an attractive distribution to shareholders this quarter,” said chief executive Patrick Pouyanne in an earnings statement.
The share prices of Shell and TotalEnergies fell at the opening of trading following the release of their quarterly results.
On Thursday, Spain’s Repsol also reported a decline in profits, a day after the Norwegian state-owned energy company Equinor reported similar results.
Michael Hewson, chief market analyst at CMC Markets UK, remarked, “The impact of the sharp declines in oil and gas prices was laid bare, and this is likely to be a recurring theme when BP reports results next week.”
Last year, gas prices spiked after Russia halted gas exports to Europe and supply concerns shook oil markets.
However, natural gas prices plummeted as European nations discovered new suppliers, accumulated reserves, and experienced a benign winter.
Oil prices have also declined, in part due to concerns about falling demand as the global economy slows and China’s post-Covid recovery falters.
Despite the oil and gas industry’s shift toward renewable energy and away from fossil fuels, profits remain high.
This week, a British court dismissed a claim that Shell’s leadership mismanaged the company’s climate risks.
ClientEarth, an environmental law NGO and minor Shell shareholder intends to appeal the High Court of England and Wales’ ruling.
In recent years, corporations have faced an increasing number of climate-related lawsuits in response to mounting pressure to intensify efforts to combat global warming.
