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British oil and gas company Shell Plc has reported a 23% fall in net profit for the first half of 2025, blaming the decline on weaker energy prices and global economic uncertainty. The multinational firm said its net profit dropped to $8.4 billion, compared to $10.9 billion recorded in the same period in 2024.
Shell’s financial report, released ahead of market opening at the London Stock Exchange, also showed that its group revenue declined by nearly 9%, from last year’s figures, settling at $136.6 billion for the six-month period.
According to the oil giant, the sharp fall in profits was largely caused by “lower realised liquids and gas prices.” The company pointed to a combination of global events that created a less favourable market for oil and gas, impacting its earnings across different segments.
Shell’s Chief Executive Officer, Mr. Wael Sawan, said the company had to navigate a more challenging economic climate, shaped by global inflation concerns, trade tensions, and increased oil output from OPEC+ countries. He explained that these external pressures contributed to the reduction in market prices, which in turn hit Shell’s bottom line.
“We’re operating in a less favourable macro environment,” Sawan said. “But we are staying focused on delivering long-term value and maintaining financial discipline.”
A major factor weighing on energy prices globally has been the fear that new trade tariffs imposed by U.S. President Donald Trump could slow global economic growth. This has sparked concerns among traders and investors that demand for energy could weaken, pushing oil and gas prices even lower. Simultaneously, increased production from oil-exporting nations, particularly those in the OPEC+ group, has led to a surplus in supply, further dragging down prices.
Shell’s decision to maintain shareholder confidence was evident in its announcement to buy back $3.5 billion worth of its own shares. The company said the buyback programme is part of its strategy to reward investors and stabilise its stock price during periods of market volatility. The buyback will also help reduce the number of outstanding shares, effectively improving earnings per share for shareholders.
Industry analysts say that while Shell’s performance is still strong by global standards, the dip in profits signals the level of volatility energy companies are facing due to geopolitical events, supply chain shifts, and market reactions to global policy changes.
They noted that the oil and gas sector globally has been facing pressure from multiple fronts — including the push for renewable energy, climate change regulations, and the long-term transition towards clean energy sources. Despite these pressures, major players like Shell continue to adapt by rebalancing their investment portfolios and expanding into liquefied natural gas (LNG), carbon capture, and low-carbon energy solutions.
Shell said it remains committed to its broader energy transition strategy, but acknowledged that short-term earnings would likely remain vulnerable to global oil price swings and policy shocks.
Investors and market observers will be watching closely how Shell navigates the rest of 2025, especially in the face of ongoing trade developments in the U.S., evolving OPEC+ strategies, and demand recovery in major energy-consuming countries like China and India.
Meanwhile, the company reaffirmed its commitment to maintaining strong dividend payouts and continued capital investment in key sectors that support long-term energy sustainability.
