Oil giant Shell has reported a first-quarter profit of $9.6 billion, surpassing analysts’ expectations of $8.6 billion. It continues a record-breaking streak following the surge in commodity prices in 2022 due to Russia’s invasion of Ukraine. This impressive performance follows the company’s adjusted earnings of $9.1 billion in the same quarter last year and $9.8 billion in the final quarter of 2022.
In response to these results, Shell’s shares experienced a 3% increase during early morning trading. With a significant cash inflow, the company maintained its share buyback program at $4 billion over the next three months and kept its dividend steady at $0.2875 per share.
Shell attributes its strong quarterly results to improved operational performance, reduced daily business costs, and robust fuel trading and optimization, which offset the impact of weaker oil and gas prices. The company’s net debt dropped to $44.2 billion in the first quarter, down from $48.5 billion during the same period last year.
CEO Wael Sawan commented on Shell’s Q1 earnings, stating that the company demonstrated robust operational performance amid ongoing market volatility while continuing to supply secure energy.
Shell’s performance follows UK rival BP, which reported a decline in Q1 profit but still managed to beat analyst expectations due to strong oil and gas trading. However, BP shares fell after the company announced plans to reduce its share buybacks.
Big Oil’s Record-Breaking 2022:
Big Oil shattered previous annual profit records in 2022 as volatile oil and gas prices emerged in the wake of Russia’s invasion of Ukraine. Shell reported adjusted earnings of $39.9 billion for the full year, surpassing the previous annual record of $28.4 billion in 2008 and more than doubling the firm’s 2021 profit of $19.29 billion.
Amid criticism, Big Oil executives have defended their significant profits by emphasizing the importance of energy security during the transition away from fossil fuels while arguing that higher taxes could deter investment. Fossil fuels, such as coal, oil, and gas, are the primary contributors to the climate crisis.
As part of its commitment to achieving net-zero emissions by 2050, Shell reported that it’s Renewable and Energy Solutions unit’s Q1 adjusted earnings reached $389 million, an increase from the $293 million reported in the final quarter of last year.