Shell, the oil and gas giant, has reported robust profits, primarily due to the recent increase in oil prices.
In the period between July and September, the energy company recorded earnings of $6.2 billion (£5.1 billion), a significant improvement from the previous quarter.
Comparatively, profits were lower than the $9.4 billion reported in the same period last year when oil and gas prices surged due to Russia’s invasion of Ukraine. Although current oil prices remain below those levels, they have shown recent increases.
The rise in oil prices is largely attributed to production cuts by members of the OPEC+ group, aimed at stabilizing the market. The World Bank recently warned that ongoing conflicts in the Middle East could push crude oil prices up to $150 per barrel, in contrast to the current price of $85.
Shell’s earnings for the past three months surged by 23% compared to the previous quarter, benefiting from higher oil prices, increased oil and gas production, and improved returns from refining and gas trading.
The energy sector experienced a surge in oil prices in 2022 followed by a subsequent decline earlier this year, which led to reduced profits for energy companies. However, the cost of crude oil has once again been on the rise since production cuts were implemented in the summer.
The production cuts were introduced by OPEC+ members, led by Saudi Arabia and Russia, as they expressed concerns about weakening global demand.
Moscow also attributed the need for cuts to Western “interference with market dynamics,” referencing restrictions placed on Russian oil following its invasion of Ukraine.