The FTSE 100 company made adjusted profits of $11.5bn (£9.5bn) in the second quarter of the year, beating its previous high – set between January and March – by 26%. Profits were more than double compared to the same period in 2021. The choppy trading for Shell, BP and other oil and gas majors has come at odds with households and much of the rest of the economy, which has had to contend with higher energy prices that have pushed inflation to 40-year highs. in the UK and elsewhere, and which threaten to send economies into recession in much of the world. The scale of oil company profits has prompted the UK government to finally give in to demands for a windfall tax to redistribute some of the profits, although some senior Tory ministers are believed to favor scrapping the tax amid a leadership campaign that will lead to a new prime minister and new cabinet in September. The windfall tax – known as the energy profits levy – will not take effect until July 14, meaning second-quarter earnings and payments to shareholders were unaffected. But it remained a bonus for Shell and its shareholders, who received $7.4 billion in the first quarter of 2022 and will receive another $6 billion in share buybacks and $1.8 billion in dividends announced on Tuesday. Shell said it had “higher realized prices, higher refining margins and higher gas and electricity transactions”. Vladimir Putin’s incursion meant Shell may have to give up its stake in the Sakhalin-2 gas project with Russia’s Gazprom. But the recognized cost of leaving Russia is $4.3 billion – just over a third of the profits Shell has made in the three months since Kremlin troops entered Ukraine. The company had already booked $4.2 billion in costs related to its withdrawal from Russia, but only increased that estimate by $111 million in the second quarter of the year. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Shell said it expected the tight energy market to be here to stay. It added $4.3 billion to its earnings attributable to shareholders to account for higher-than-expected prices over the medium to long term “reflecting current energy market demand and supply fundamentals.” Ben van Beurden, Shell’s chief executive, acknowledged the “enormous challenges for consumers, governments and companies” caused by “volatile energy markets” but argued that the company was “using our financial strength to invest in secure energy supply the world needs today by taking real, bold steps to reduce carbon emissions and transform our company for a low-carbon energy future.”
