Michelle ThompsonThe oil and gas industry leader, Shell, has reported robust profits, with a boost attributed to the resurgence in oil prices.
The energy giant reported earnings of $6.2 billion (£5.1 billion) for the period spanning July to September, showing a significant increase compared to the previous quarter. Nevertheless, profits were lower than the $9.4 billion reported for the same period the previous year. This decrease was attributed to the spike in oil and gas prices caused by Russia’s invasion of Ukraine during that time.
Currently, oil prices are below the levels seen in that period, but they have recently started to rise. This resurgence can be mainly attributed to the efforts of the OPEC+ group, which consists of oil-producing nations, to reduce output and stabilize the market.
The World Bank recently issued a warning that ongoing conflicts in the Middle East could potentially drive crude oil prices up to $150 per barrel, compared to the current $85 per barrel.
Shell stated that its earnings for the past three months saw a 23% increase compared to the previous quarter. This improvement was attributed to higher oil prices, increased oil and gas production, as well as enhanced profits from refining and gas trading.
In 2022, oil prices experienced a surge before declining earlier this year, impacting the profitability of energy companies. However, the cost of crude oil has started to climb once again following production cuts implemented during the summer.
The decision to cut production was made by OPEC+ members, with Saudi Arabia and Russia playing leading roles, in response to concerns about weakening global demand. Russia also attributed the situation to Western “interference with market dynamics,” referring to restrictions on Russian oil following its invasion of Ukraine.
