Shell's Profits Soar on Surging Oil Prices

Several forces drove the surge in earnings. The international benchmark price of Brent crude oil climbed from roughly $73 a barrel before the Iran conflict began to peaks 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 swings widened the gap between buying and selling prices, allowing Shell's oil trading desk to capture unusually large margins — the same trend that helped rival BP (British Petroleum) more than double its first-quarter profits last week, and lifted Norway's Equinor to its biggest quarterly result in three years. Shell's refining business, which converts crude oil into petrol and jet fuel, also benefited from wider margins.

The bumper profits have reignited calls for governments to tighten windfall taxes on fossil fuel companies. Danny Gross of Friends of the Earth said "fossil fuel giants are pocketing monstrous profits while drivers are being squeezed at the petrol pump." 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 UK-based extraction, while most of Shell's earnings come from overseas. Households face further pain when the British energy price cap is revised in July, with bills expected to rise by around £200. Shell itself faces operational headwinds: production fell 4% from the previous quarter after attacks damaged its Pearl gas facility in Qatar, which the company says will take roughly a year to repair.