Shell reports higher-than-expected earnings as oil prices surge
Shell posted underlying earnings of 10.81 billion US dollars for the third quarter, drawing criticism as rival BP reported a sharp jump in profits amid soaring oil prices.
Shell has come under fire after reporting better-than-expected underlying earnings of 10.81 billion US dollars for the three months to September 30, a result that critics say reflects windfall gains from rising oil prices rather than anything the wider public has benefited from.
The FTSE 100 oil giant's figures were published at a time when the price of crude has climbed sharply, lifting the revenues of energy producers across the sector. Shell's results landed ahead of analyst expectations, which added to the scrutiny of the company's performance during a period of heightened volatility in global energy markets. The company's underlying earnings figure is the measure that investors and analysts watch most closely, because it strips out certain one-off effects and gives a clearer picture of how the core business is performing.
Shell was not alone in posting strong numbers. Rival BP reported that its profits jumped to 8.46 billion US dollars, equivalent to around £6.31 billion, in the third quarter, up from 2.21 billion dollars, or about £1.65 billion, a year earlier. The year-on-year comparison shows how quickly the sector's fortunes have shifted: BP's quarterly profit more than tripled over the same period, a swing that is hard to separate from the rise in the price of oil.
The scale of the profits has prompted sharp reactions from some commentators and political figures, who argue that energy companies should be doing more to pass on gains to households already struggling with the cost of living. BP's results were described in one report as an 'obscene' haul, a characterisation that captures the growing public debate over whether the sector's earnings are justified when consumers face high fuel and energy bills. Critics point to the gap between boardroom success and the pressure on family budgets as the central issue, rather than the accounting figures themselves.
Both companies are expected to face further questions about how they will use their cash. Strong quarterly results typically raise expectations about shareholder payouts, including dividends and share buybacks, and about whether surplus earnings will be reinvested in production, low-carbon projects or other areas. Neither set of results on its own settles those questions, but together they place the energy majors at the centre of a broader argument over how the benefits of high oil prices should be shared.
For now, the figures stand as a clear marker of how much the sector has gained from the current spike in oil prices, and of the political and public pressure that such gains are attracting. Whether that pressure translates into policy or changes in corporate behaviour will become clearer as more results and commentary follow.
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