Shell profits tumble as trading slows down, energy prices weigh down performance
Shell profits have taken a sharp hit in the first half of the year, as the energy giant reported a 30% drop in adjusted earnings. The decline, driven by volatile markets and softer oil and gas prices, paints a challenging picture for the FTSE-listed firm.
The energy behemoth posted net profits of $9.84 billion (£7.4 billion) for the first six months of 2025, well below the previous year’s haul. Shell pointed to reduced trading and optimization margins as key culprits behind the dip.
Still, the numbers weren’t all doom and gloom. Despite the downward trajectory, second-quarter profits outpaced analyst forecasts, offering a sliver of optimism to investors.
Adding to the pressure, income attributable to shareholders slumped by 23%. The firm also absorbed a $509 million (£383 million) blow from the UK’s energy profits levy, a windfall tax introduced to curb excess profits in the sector amid soaring household energy bills.
“Shell generated robust cash flows reflecting strong operational performance in a less favourable macro environment,” said Wael Sawan, CEO of Shell.
“We continued to deliver on our strategy by enhancing our deep-water portfolio in Nigeria and Brazil, and achieved a key milestone by shipping the first cargo from LNG (liquified natural gas) Canada.”
The chief executive also highlighted Shell’s efficiency drive, claiming $3.9 billion (£2.9 billion) in structural cost cuts since 2022—largely through non-portfolio actions.
“This focus enables us to commence another 3.5 billion dollars (£2.6 billion) of buybacks for the next three months, the 15th consecutive quarter of at least 3 billion dollars in buybacks,” he added.
While the wider energy market has cooled after record highs in 2022, Shell continues to lean into its long-term strategy. Investment in LNG and upstream operations suggests the firm is betting on a rebound, despite the current macroeconomic headwinds.
Still, questions remain. Will softening global demand and regulatory pressures continue to eat into future profits? Or is this a temporary dip in an otherwise resilient performance?
For now, Shell maintains its buyback commitments, aiming to keep shareholders reassured, even if the profit margins aren’t quite what they used to be.
