Shell Reports Increased Profit Driven by Higher Volumes and Reduced Costs: What This Means for Investors and Business Owners
London: British energy giant Shell reported an 11 percent increase in net profit for 2025, reaching $17.84 billion, up from $16.1 billion the previous year. This growth was driven by higher volumes and reduced costs, which helped offset the impact of falling oil and gas prices.
Energy prices last year were pressured by concerns over US President Donald Trump’s tariffs and increased output from OPEC+ nations. Prices saw a temporary rally amid rising military tensions between Washington and Tehran but later eased as diplomatic tensions diminished.
Shell’s underlying earnings, which exclude certain energy price fluctuations and one-off charges, declined by 22 percent to $18.53 billion in 2025. In the fourth quarter alone, net profit dropped 22 percent from the previous quarter to $4.1 billion.
Despite the lower earnings in Q4, Shell CEO Wael Sawan highlighted that cash flow remained strong. The company announced plans to raise its dividend and initiate a new $3.5 billion share buyback program.
In November, Shell announced it would withdraw from two offshore wind projects in the North Sea, reflecting a strategic shift away from alternative energy towards a focus on fossil fuels. This move aligns with a broader trend among some energy companies to scale back certain climate goals in favor of more profitable oil and gas production.
Meanwhile, Shell’s British competitor BP, which is set to release its 2025 earnings next Tuesday, reported last month that it would record a write-down of up to $5 billion related to its energy operations.
Special Analysis by Omanet | Navigate Oman’s Market
Shell’s 2025 results highlight the resilience of fossil fuel profitability despite volatile oil prices and geopolitical tensions, signaling that traditional energy sectors remain lucrative. For businesses in Oman, this underscores the ongoing importance of oil and gas investments, while also cautioning against over-reliance on alternative energies that may face strategic pullbacks. Smart investors and entrepreneurs should monitor geopolitical risks and Shell’s strategic pivot, looking for opportunities tied to fossil fuel demand growth and potential gaps left by shifts in global energy portfolios.
