London (AFP) – British energy giant Shell on Friday reported a sharp drop in first-quarter net profit as it was hit by weaker oil prices but pushed ahead with shareholder returns. Profit attributable to shareholders fell 35 percent to $4.8 billion in the first quarter of 2025 from a year earlier, Shell said in an earnings statement. Total revenue dropped six percent to $70.2 billion.
Shell and other oil majors have been hit by a recent slump in crude prices on fears that US President Donald Trump’s tariffs could cause a slowdown in the global economy, impacting demand. But the company did manage to beat analysts’ expectations and announced sizeable shareholder payouts. Chief executive Wael Sawan said the results gave Shell “confidence to commence another $3.5 billion of buybacks for the next three months.” Shares in the company rose more than three percent in morning deals on London’s FTSE 100 index, which was trading higher overall.
“Shell’s one of the best-equipped oil majors to deal with a low-pricing environment and should be able to sustain that level of payouts as long as oil doesn’t dip below $60 for a prolonged period,” said Derren Nathan, head of equity research at Hargreaves Lansdown. Shell was also impacted by weakening oil prices in 2024, with annual net profit falling 17 percent.
The recent drop in oil prices comes after the company scaled back various climate objectives, along with rival BP, to focus more on oil and gas to raise profits. Last year it announced it would no longer lead development of new offshore wind projects. Greenpeace UK senior climate advisor Charlie Kronick responded to the company’s results, calling for carbon polluters to pay to “make Britain more resilient against the climate crisis Shell is fuelling.”
BP this week reported that its net profit dropped 70 percent in the first quarter to $687 million, driven by weaker gas sales and lower refining margins.
© 2024 AFP
