Shell and TotalEnergies have reported significant increases in their net profits for the third quarter, despite the decline in oil prices. Shell’s net profit rose by 24% to $5.3 billion, while TotalEnergies saw a 61% jump to $3.7 billion. This improvement is attributed to increased trading margins and sales volumes.
Shell’s profit after tax increased from $4.3 billion in the same period last year, with the company’s chief executive, Wael Sawan, citing “strong delivery” as the reason for commencing another $3.5 billion in share buybacks. The company’s adjusted earnings, excluding exceptional items, fell by nearly 10% but still exceeded market expectations. Shell also reported a reduction in net debt from the previous quarter.
The energy sector has faced challenges this year due to concerns over US President Donald Trump’s tariffs and their potential impact on economic growth. Additionally, OPEC+ nations have increased oil production, putting pressure on energy prices. However, Shell’s upstream division has benefited from increased production in Brazil and the Gulf of Mexico, while the company’s gas trading has also seen a boost.
TotalEnergies’ significant profit increase is a notable development in the industry, while Norwegian energy giant Equinor reported a net loss for the third quarter due to lowered oil price outlook. Spanish group Repsol also experienced a sharp drop in profits for the first nine months of the year.
Analysts attribute Shell’s profit increase to its upstream division and gas trading, which performs well in volatile times. The company’s share price remained flat in London morning deals following the update. Shell, along with rival BP, has scaled back its climate objectives to focus on oil and gas production, aiming to raise profits. The company recently started up its liquified natural gas project in Canada and abandoned the construction of a biofuel plant in the Netherlands.
BP is set to report its third-quarter results next week, following a strong performance in the second quarter. The energy industry continues to face uncertainty, with companies adapting to changing market conditions and adjusting their strategies to remain profitable. As the sector evolves, companies like Shell and TotalEnergies are focusing on their core businesses to drive growth and increase shareholder value.