Shell has reported a smaller-than-expected drop in first-quarter profits, despite weaker trading conditions and lower commodity prices. Europe’s largest oil and gas group announced it would maintain the pace of its share buybacks, repurchasing $3.5 billion worth of shares in the upcoming quarter, underlining its strong financial position.
The company reported adjusted earnings of $5.6 billion for the first three months of 2025, down from $7.7 billion in the same period last year. However, this result was notably better than analysts’ predictions, which had forecast earnings of around $5 billion.
The decrease in profits year-on-year was primarily due to lower liquefied natural gas (LNG) production and prices, as well as a tough comparison with an exceptional quarter in 2024 for Shell’s oil and fuels trading arm, which had benefited from supply disruptions.
Wael Sawan, Shell’s CEO, expressed confidence in the company’s performance, stating: “Shell delivered another solid set of results in the first quarter of 2025. Our strong performance and resilient balance sheet give us the confidence to commence another $3.5 billion of buybacks for the next three months, consistent with the strategic direction we set out at our capital markets day in March.”
Shell’s adjusted earnings exclude one-time charges, including a $500 million hit related to the UK’s energy profits levy, also known as the North Sea windfall tax.
Despite the challenging market conditions, Shell’s commitment to shareholder returns remains firm, as evidenced by its ongoing buyback program. The company is also focusing on growing its LNG sales, aiming for an annual increase of 4 to 5 percent through 2030.
Sawan, who took the CEO role in 2023, has faced the challenge of narrowing Shell’s valuation gap with its American rivals, such as ExxonMobil and Chevron. Under his leadership, Shell has shifted its focus back towards fossil fuels, reducing its investments in green energy while positioning itself as a reliable investment choice.
Shell also reported a lower-than-expected LNG production in the first quarter due to cyclones and unplanned maintenance at its Australian facilities. However, despite these challenges, the company managed to outperform expectations with solid results across its upstream, marketing, and oil trading divisions.
The company’s positive results stand in contrast to those of its smaller rival, BP, which reported a significant drop in first-quarter earnings earlier this week. Following Shell’s announcement, the company’s shares rose by 2.7%, or 66p, reaching £25.03.
