Shell's Oil Bonanza: Profits Soar as Iran War Drives Up Prices
Shell's profits for the second quarter of the year have more than doubled to $9.84bn after the Iran war pushed up oil prices.
The oil giant's profits for the April-to-June period reached $9.84bn, up from $4.26bn at the same point last year.
Iran War Disrupts Oil Supplies
The price of oil has soared since the outbreak of the US-Israel war with Iran due to major disruption to global supplies of oil and liquid natural gas (LNG) through the Strait of Hormuz. Before the conflict began, the price of Brent crude, the global benchmark for oil prices, was around $73 a barrel. Since then, it has peaked above $120 but also fallen back below $100 as speculation has swirled over when the Strait of Hormuz will reopen.
Trading on Oil Price Swings
Shell and other energy giants such as BP and Norway's Equinor have seen bumper profits this year, partly down to trading on oil price swings. These big movements in the oil price can widen the gap between buying and selling prices which typically enables traders to make bigger profits. Shell chief executive Wael Sawan said the company's "operational performance enabled very strong results during another quarter of severe disruption in global energy markets".
First-Half Earnings Surge
Together with its profits of $6.92bn for the first three months of the year, it means Shell has seen a 70% surge in first-half earnings. Shell's profits for the first half of the year have reached $16.76bn, up from $9.84bn at the same point last year. This increase in earnings is partly due to trading on oil price swings, which has enabled energy giants to make bigger profits.
What's Next
The Strait of Hormuz remains closed, and the price of oil continues to fluctuate. Shell's profits will likely continue to soar as long as the global oil market remains disrupted. As the situation develops, energy giants will continue to trade on oil price swings, making bigger profits in the process. The future of the global oil market remains uncertain, but one thing is clear – the Iran war has created a bonanza for energy giants like Shell.
Source: Joy Online
