Market Turbulence Weighs on Trading, Shell (SHEL.US) Q2 Profit Plummets 32% Still Beats Expectations
According to our sources at Zhong Tong Finance APP, Shell Group (SHEL.US) released its second-quarter earnings report yesterday, due to declining oil prices and difficulties in responding to sudden market fluctuations caused by unexpected messages. The company's Q2 adjusted net profit was $42.6 billion, lower than last year's $62.9 billion but exceeding the average analyst expectation of $37.4 billion.
Another analysis provided by the company shows that originally, analysts predicted Shell's second-quarter profit to be $37.4 billion. Last year, the company's adjusted earnings were $62.9 billion; in the first quarter of 2025, it was $55.8 billion.
This time, before releasing the report, this London-listed company had pointed out that its integrated natural gas business performance was soft, and its chemical and product departments experienced losses.
Over the past three months, up to June, this European energy giant faced a turbulent market environment: from US President Donald Trump's escalation of trade wars, to OPEC+'s unexpected decision to accelerate production, to brief conflict in the Middle East, a series of events hit the market. Ultimately, this quarter's oil price dropped about 10%.
Shell's internal renowned trading business is usually one of its biggest profit growth points. CEO Well Sawn once revealed that over the past ten years, the company's trading department has never suffered losses in any quarter.
However, despite big commodity traders often benefiting from market fluctuations, several energy industry executives have complained in recent weeks that the repeated volatility of oil prices makes it harder to grasp trading opportunities. Shell warned earlier this month that this quarter's oil and gas trading income would "significantly decline" compared to last year.
Over the past two years, Sawn has been committed to reducing costs, improving reliability, and divesting underperforming assets, trying to narrow the valuation gap with US peers. This "sprint" is already showing signs of success - since 2025, Shell's performance has exceeded that of other major oil companies.
Analysts emphasize that Shell's balance sheet has been improved. The company stated in May that even if oil prices fell to $50 per barrel (far lower than the current level), its financial strength would still be able to support quarterly share repurchases of over $30 billion.
This year, Shell announced a plan to prioritize shareholder returns, increase cost savings, and further push forward with liquefied natural gas (LNG) business. This strategic update aims to strengthen its commitment to creating value while continuing to focus on "performance, discipline, and streamlined operations."
This plan seems to have been recognized by investors. Since this year, Shell's stock price has outperformed many European peers, rising by 8%. In comparison, British Petroleum rose 3%, TotalEnergies fell 2%, and ExxonMobil rose 4%.
It is worth noting that just a month ago, Shell made a statement to the media denying any intention to acquire its UK competitor, British Petroleum Company (BP.US). This statement calmed long-held speculation, and according to UK takeover rules, Shell will not be able to make an acquisition bid on British Petroleum for the next six months.