Shell has today reported a record first-quarter profit of $9.13 billion, boosted by higher oil and gas prices, stellar refining profits and the strong performance of its trading division.
Shell joins sector rivals, including BP and TotalEnergies, in making big profits from the commodity price volatility stoked by Russia's invasion of Ukraine that began on February 24.
It achieved the highest quarterly profits since 2008 even after writing down $3.9 billion post-tax as a result of its decision to exit its operations in Russia. It is also winding down oil and gas trading with Russia.
By the end of this year, Shell said it would also stop all of its long-term Russian crude oil purchases, except two contracts with a "small, independent Russian producer" that it did not name.
Its contracts to import refined oil products from Russia will also end, it said, adding it still had running long-term contracts to buy Russian liquefied natural gas.
The war in Ukraine "caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted," Shell chief executive Ben van Beurden said in a statement.
The European Union's chief executive yesterday proposed a phased oil embargo on Russia that if backed by member states would be a watershed for the world's largest trading bloc, which depends on Russian oil and gas.
Shell said that its dividend payments and share repurchases reached $5.4 billion in the quarter, part of its plan to buy back $8.5 billion shares in the first half of the year.
Its dividend rose to 25 cents per share as planned.
In the current environment, it said it expects shareholder distributions to exceed 30% of cashflow in the second half of the year.
First-quarter adjusted earnings rose 43% from the previous quarter to $9.13 billion, above an average analyst forecast provided by the company for a $8.67 billion profit.
That compares with earnings of $3.23 billion a year earlier.
Boosted by strong refining margins, Shell's adjusted earnings from refining and marketing refined products leapt to $1.17 billion from a loss of $130m in the previous quarter and a profit of $781m last year despite volumes falling to around 1.6 million bpd from 1.9 million.
