Shell's Profits Jump as Oil Prices Climb

Several factors helped drive the rise. The price of Brent crude oil climbed from about $73 a barrel before the Iran conflict to highs above $120, before settling near $101 this week. The Strait of Hormuz, a narrow waterway that normally carries about 20% of the world's oil and liquefied natural gas (LNG), has been effectively closed. Sharp price changes widened the gap between buying and selling, helping Shell's oil traders earn larger margins. The same trend helped BP (British Petroleum) more than double its first-quarter profits last week, and lifted Norway's Equinor to its best quarterly result in three years. Shell's refining business, which turns crude oil into petrol and jet fuel, also benefited from wider margins.

The strong profits have led to fresh calls for tougher windfall taxes on fossil fuel firms. Danny Gross of Friends of the Earth said oil companies are 'pocketing monstrous profits' while drivers and households pay more. In the United Kingdom (UK), the Energy Profits Levy — a windfall tax introduced in 2022 — has been extended to 2030, but it applies only to oil and gas extracted in the UK, while most of Shell's earnings come from abroad. UK households can expect bills to rise by around £200 when the energy price cap is updated in July. Shell's own production fell 4% from the previous quarter after attacks damaged its Pearl gas facility in Qatar, which will take about a year to repair.