Shell Laughs Alone with Record Q3 Performance... Biden Says "Lower Prices"

$9.4 Billion Profit Surpasses Market Expectations
Leadership Change Amid Low-Carbon Pressure

(Photo by Bloomberg)

[Asia Economy Reporter Yujin Cho] The global oil giant Shell has once again posted record-breaking earnings, benefiting from the energy crisis. Regarding the growing controversy over the 'windfall tax' on the booming profits of global oil giants, Shell has officially stated for the first time that it is prepared to accept tax increases.

On the 27th (local time), Shell announced in its Q3 earnings report that it recorded a profit of $9.454 billion (approximately 13 trillion KRW). This is more than double last year's profit ($4.1 billion) and marks the second-largest profit in the company's history. It also significantly exceeded the market expectation of $9 billion.

In its earnings press release, Shell stated, "We posted solid results amid a turbulent economic environment, including lower crude oil prices and higher gas prices compared to the previous quarter." The average crude oil price in Q3 remained high at $93 per barrel, and natural gas prices also rose.

ExxonMobil, which shares the position of the world's second-largest oil major with Shell, is also expected to post record earnings. ExxonMobil is scheduled to announce its Q3 earnings at 7:30 a.m. on the 28th.

The debate over the introduction of a windfall tax on the oil companies' solo boom is expected to reignite. Shell's management stated that they are ready to accept the introduction of a windfall tax on oil and gas companies benefiting from the energy crisis. This is the first time Shell has made an official statement regarding the windfall tax controversy.

The world's top five oil companies?ExxonMobil, Chevron, Shell, British Petroleum (BP), and TotalEnergies?earned a combined $60 billion in Q2. Such quarterly earnings from these five global oil giants are unprecedented. Consequently, governments in the UK, the European Union (EU), and the United States are moving to impose a 'windfall tax' to levy higher taxes.

Shell CEO Ben van Beurden said during the earnings conference call, "It is a social reality that governments seek oil and gas companies that have relatively benefited to offset the costs consumers face due to soaring energy prices," adding, "Our industry must be prepared to consider and accept tax increases."

The UK, where Shell's headquarters are located, decided in May to impose a 25% excess profits tax on oil and gas companies that have made huge profits from high oil prices. However, foreign media report that taxes related to energy profits are not expected to be paid until early next year.

Under pressure from investors to transition to low-carbon energy, Shell is also preparing for a leadership change. Ben van Beurden, who has served as Shell's CEO since 2014, will step down at the end of this year, and Wael Sawan, who has led the gas and renewable energy division, will take over as the new CEO starting January 1 next year.

Meanwhile, U.S. President Joe Biden, desperate to control oil prices ahead of the midterm elections, criticized Shell for prioritizing shareholder profits instead of contributing to lowering oil prices. In a major investment commemorative speech by Micron held in Syracuse, New York, Biden said, "Shell has more than doubled its earnings compared to last year and has also increased dividends," criticizing, "Shell's profits are going to shareholders instead of lowering prices." He added, "Gas prices should also be lowered in line with the drop in crude oil prices per barrel."

With profits surging, Shell, which had repurchased $6 billion of its own shares up to Q2, announced plans to repurchase an additional $4 billion of shares in Q3 as part of shareholder returns. Dividends will be increased by 15%. As a result, the total shareholder returns Shell has made this year amount to $18.5 billion.

This content was produced with the assistance of AI translation services.