Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Shell expected to report ‘another monster set’ of results

Shell chief executive Ben van Beurden.
Shell chief executive Ben van Beurden.

Supermajor Shell has been tipped to replicate the eye-watering profits it reported earlier this year.

The London-listed energy giant will publish its second quarter financial results tomorrow against the ongoing backdrop of high oil and gas prices.

Analysts are predicting “another monster set of cash flow figures”, with Big Oil across the board poised for record profits in Q2, driven by high energy prices.

In May, Shell reported record quarterly results for the first three months of 2022, with takings of £8.6 billion and revenue of around £67bn.

That was despite it suffering a £3.1bn hit over its exit from Russia, following the country’s invasion of Ukraine.

Shell’s gigantic Q1 profits, as well as those of its peers, fuelled calls for a windfall tax on oil and gas producers.

Just over a couple of weeks later the then chancellor Rishi Sunak announced the energy profits levy.

Shell Q2 results

There are likely to be calls for government to go further again, with the likes of Shell, BP and TotalEnergies expected to announced whopping profits in the coming days.

Norwegian energy giant Equinor has already set the pace, unveiling first-half adjusted earnings of £29.2bn.

Biraj Borkhataria, associate director of European research at Royal Bank of Canada, said: “We expect Shell to report another monster set of cash flow figures, following some extremely tough comps (comparatives) in Q1.“

Why are oil companies’ takings so high?

At the turn of the year, oil and gas markets were already beginning to tighten.

A myriad of factors including countries emerging from lockdown, a cold snap in Asia, and record low wind speeds combined to send gas prices through the roof in 2021.

Brent crude was also in a far healthier state than the previous year, when lockdowns and the subsequent industry downturn caused the price to plummet.

Vladimir Putin’s attack on Ukraine and the economic sanctions from western governments that followed simply served to exacerbate the problem.

Oil Russia Ukraine
Ukrainian soldiers from the 93rd Cold Yar Brigade of the Ukraine Armed Forces raises a Ukrainian flag in the Russian-backed rebel held Donetsk frontline  on Wednesday February 23, 2022.

In February, oil crashed through the $100 a barrel mark for the first time since 2014, and has remained around that point or higher since.

John Moore, senior investment manager at Brewin Dolphin, said: “Shell, along with the other oil majors, is expected to post an impressive set of results this quarter. The rising oil price in the first half of the year has been the obvious influence, intensified by the sanctions on Russia following its invasion of Ukraine.

“It hasn’t all been plain sailing, though: oil majors had to sell off their interests in Russia, the previous set of results attracted political attention, and there have been issues with the supply of liquified natural gas. Nevertheless, Shell has managed to shrug off many of these challenges and is likely to deliver some positive news for shareholders.”

Conversation