Shell’s eye-watering profits after global conflict sends oil prices soaring

Shell has reported a dramatic jump in profits after the conflict involving Iran sent global oil prices surging, boosting earnings for the energy giant. The company posted profits of $9.84 billion (£7.36billion) for the three months to the end of June, more than double the $4.26billion (£3.19billion) recorded during the same period last year.

The sharp increase comes after oil prices spiked following the outbreak of the US-Israel war with Iran, which disrupted global supplies of crude oil and liquefied natural gas (LNG) passing through the strategically vital Strait of Hormuz.

Combined with first-quarter profits of $6.92billion (£5.19billion), Shell’s earnings for the first half of the year have risen by around 70%.

Shell chief executive Wael Sawan said the company’s performance had remained strong despite ongoing instability in energy markets.

“Our operational performance enabled very strong results during another quarter of severe disruption in global energy markets,” he said.

The conflict has fuelled sharp swings in oil prices, with Brent crude, the international benchmark, rising from around $73 a barrel before hostilities began to more than $120 at its peak.

Although prices have since eased to below $100 a barrel amid speculation over when the Strait of Hormuz could fully reopen, the volatility has proved lucrative for major energy companies.

Large price swings typically widen the gap between buying and selling prices, allowing oil traders to generate greater profits.

Shell is not alone in benefiting from the market turmoil.

Other major energy producers, including BP and Norway’s Equinor, have also reported strong earnings this year, with higher oil prices and increased trading activity contributing to bumper profits.