Shell’s revenue took a significant hit in 2025, with net income dropping by over 25% from the previous year, primarily due to weakened global energy prices and less profitable refining operations. Profits dwindled from the preceding year’s impressive $7.7 billion, landing at approximately $5.6 billion for Q1. This was a shortfall compared to the previous year, but still surpassed market predictions which had positioned earnings just shy of $5 billion.
The ongoing trade conflict provoked by U.S. President Donald Trump fueled concerns of a potential economic downturn, leading to softer oil prices in recent months. During Q1, the average price of Brent crude oil, a key global benchmark, was $75 per barrel, contrasting with the previous year’s higher figure around $87.
The company managed to mitigate some of the impact of the reduced energy prices and refining margins through various measures. These included reduced write-offs linked to exploratory wells, lower running costs and increased margins from the sale of their various products, as Shell announced.
However, Shell’s refining performance garnered less profit in 2025, earning an average of $6.20 per barrel. This was significantly lower than the previous year’s $12. Yet, it exhibited an improvement over the $5.50 per barrel seen in Q4 of 2024.
In light of increased revenue from the sales of liquefied natural gas, Shell committed to return a larger share of profits to its stockholders in March. Shell also noted on Friday a marked $0.5 billion expense linked to the UK Energy Profits Levy, also known as the windfall tax – as well as charges for depreciation.
During the quarter, Shell bore costs of $800 million in the form of various financial levies and depreciation charges. This was a substantial decrease compared to the $2.8 billion in such expenses that the company had to contend with during the last quarter of 2024.
Despite the economic challenges, Shell stood by its promise to continue its share repurchase scheme, committing to buy back $3.5 billion worth of its own stock during Q2. The company persisted in its strategy of pursuing consecutive quarterly repurchase rounds, embarking on its 14th series of such buybacks.
The performance of Shell’s gas trading division remained consistent with the preceding quarter. This despite the impact of expired hedging contracts. Contrastingly, BP, an industry peer, announced earlier this week that the diminished performance at a similar sector had an unfavorable effect on their Q1 results.
After the announcement of their quarterly results, Shell’s share price rose by 3.3%, opening 2,516.5p higher. Despite this rebound, the company’s share value had dipped by 1.5% since the start of 2025 but had grown by 12.4% over the past year.
Remaining unfazed by the turbulence, Shell reiterated its planned investment budget for the year on Friday. The Atlanticmultinational oil and gas corporation emphasized plans to allocate between $20 billion to $22 billion for investments during the year. This announcement helped restore investors’ confidence to some extent, showcasing Shell’s resilience and strategic planning.
As one of the world’s leading energy corporations, Shell’s financial health and strategies continue to have widespread implications on the global energy market. The company’s adept management of economic challenges, such as volatile oil prices and trade conflicts, highlight its strategy to sustain growth and financial stability.
Amid all uncertainties, Shell’s commitment to maintaining consistent dividends to shareholders is an important signal of the company’s financial stability. It underscores their commitment not only to consistently reward shareholders but also to maintain a robust capital position capable of withstanding economic turmoil.
Looking into the future, Shell’s ability to navigate external pressures and their commitment to invest in strategic growth areas will remain critical for its financial health. Investors, shareholders, and the global market will continue to keenly observe how Shell responds to the intricate, unpredictable tapestry of the global energy markets.
The post Shell’s Revenue Drops by Over 25% in Q1 2025 Due to Global Energy Price Slump appeared first on Real News Now.
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