Shell's adjusted earnings fell by almost a third to $4.26bn (£3.22bn) in the second quarter, driven by a slump in European gas prices and lower oil prices. The decline was less severe than City forecasts of $3.7bn, allowing the energy giant to continue its share buyback programme.
European gas prices dropped nearly a fifth between April and June after a ceasefire between Iran and Israel eased fears of disruption to deliveries via the Strait of Hormuz. Brent crude also fell sharply, trading below $68 a barrel at the end of the quarter, down from over $86 a year earlier.
Shell attributed the profit drop to lower trading and optimisation margins, as well as weaker commodity prices. Despite the decline and a rise in debt, the company announced it would spend $3.5bn on share buybacks in the third quarter.
Chief executive Wael Sawan said the company delivered a strong operational performance in a less favourable macro environment, noting that the volatility was paper-induced rather than based on fundamental supply-demand changes.
The weaker gas prices have led to lower household bills, with the UK energy price cap falling by 7% from July. Analysts expect Shell's financial performance to improve in the third quarter due to a recent rise in oil prices.
Environmental campaigners criticised the continued profits, with Robin Wells of Fossil Free London stating that climate destruction caused by corporations like Shell must stop.
