Oil giant Shell has reported worse then expected 22% fall in annual profits as a result of falling oil prices.
In the final three months to the end of the year Shell stripped out some commodity price adjustments with one-off charge saw underlying earning fall to £13.6 billion for 2025, this represents a 40% drop quarter-on-quarter.
In the fourth quarter adjusted profits fell to £2.39 billion, this is the lowest quarterly profit for almost five years and lower than what analyst expected.
Despite the gloomy figures Shell announced £2.7 billion share buybacks for quarter one plus a dividend increase.
Shell chief executive Wael Sawan said, “2025 was a year of accelerated momentum, with strong operational and financial performance across Shell.”
He added, “In the fourth quarter, despite lower earnings in a softer macro (environment), cash delivery remained solid and today we announce a 4% increase in our dividend and 3.5 billion dollars share buyback, making this the 17th consecutive quarter of at least three billion dollars of buybacks.”
Shell’s chief financial officer Sinead Gorman said the oil giant expected oil prices to stabilise between $65 and $70 a barrel.
This is the oil giant’s weakest quarterly result since the first quarter in 2021.
Richard Hunter, head of markets at interactive investor said, “The volatility of the oil price inevitably had an effect as tepid demand and oversupply put a dampener on any price progress.”
He added, “Despite heightened geopolitical tensions, Shell is now undergoing more conservative capital expenditure, guiding for a range of between 20 billion dollars and 22 billion dollars for this year, thus underpinning shareholder returns.”
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