Oil giant Shell posts sharp drop in second-quarter profit on weaker commodity prices

LONDON — British oil giant Shell on Thursday reported a sharp year-on-year drop in second-quarter profit, citing lower fossil fuel prices and refining margins.

Shell posted adjusted earnings of $5.1 billion for the three-month period through to the end of June, missing analyst expectations of $6 billion, according to estimates collated by Refinitiv.

The company reported adjusted earnings of $11.5 billion during the same period of last year and $9.6 billion for the first three months of 2023.

Shell increased its quarterly dividend by 15% to $0.33 per share, as previously communicated in mid-June. It also announced $3 billion in share buybacks, a program it expects to complete over the next three months.

“At the end of the day, we have a balanced energy transition strategy. What we are looking to do is to be able to do the right things for now and for the future, both for our shareholders and for the planet,” Shell CEO Wael Sawan told CNBC’s “Squawk Box Europe” on Thursday.

“We are focused on creating more value with less emissions,” Sawan said. “And what that means is we will continue to pull all the levers to drive further value growth in the organization, while at the same time we will continue to meet our aggressive emissions reduction targets — both for our own emissions, as well as for our customers.”

Shares of the London-listed oil major slipped 2% on Thursday morning.

“The company had previously set the scene with downgrades in its earnings estimates to reflect a more normalised trading environment, but it has still missed expectations with today’s results,” said Stuart Lamont, investment manager at RBC Brewin Dolphin.

“The share buyback programme and increased dividend are good news for shareholders, but will inevitably come with questions attached in the current environment,” he added.

French oil major TotalEnergies also reported…