Shell has reported a rise in annual profit, showing how the British energy giant managed to withstand falling oil and gas prices during a turbulent year for global energy markets.
The company said on Thursday that profit after tax increased by 11 per cent to $17.84 billion in 2025, up from $16.1 billion a year earlier. Higher production volumes and tighter cost controls helped offset the impact of lower commodity prices.
Oil and gas markets remained under pressure for much of the year amid concerns that trade tariffs proposed by United States President Donald Trump could slow global economic growth. Prices were further weighed down by increased output from OPEC Plus producers, which added supply at a time of weaker demand.
Oil prices later rallied as Washington stepped up military warnings against Iran, one of the world’s major oil producers. However, the gains proved short-lived, with prices easing again as tensions between the two countries showed signs of cooling.
Despite the rise in headline profit, Shell said its underlying earnings fell by 22 per cent to $18.53 billion. The company said this measure, which strips out certain price movements and one-off items, better reflects the pressures facing the business.
The final quarter of the year was particularly challenging. Shell reported that net profit in the fourth quarter fell by 22 per cent from the previous quarter to $4.1 billion.
Chief executive Wael Sawan said that while earnings weakened towards the end of the year, the company continued to deliver strong cash flow.
He said cash delivery remained solid and announced that Shell would raise its dividend and begin a new share buyback programme worth $3.5 billion.
Investors reacted cautiously to the update, with Shell shares falling by about 1.5 per cent in early trading in London.
Market analysts said volatility in oil prices had taken a toll on performance. Richard Hunter, head of markets at Interactive Investor, said weak demand and oversupply limited any sustained price recovery, particularly in the final quarter.
On Thursday, international benchmark Brent crude was trading lower at around $68 per barrel, underlining ongoing uncertainty in global energy markets.
Shell has continued to refocus its strategy on oil and gas production. In November, the company announced it was ending its involvement in two offshore wind projects in the North Sea, marking a further shift away from renewable investments.
Like several other major energy companies, Shell has scaled back some climate targets, arguing that maintaining profitability and shareholder returns remains critical during the transition to cleaner energy.
The company also faced renewed legal scrutiny at the end of the year. Survivors of Typhoon Rai, which struck the Philippines in December 2021, have filed a lawsuit in the United Kingdom seeking compensation for climate-related damage.
The case, brought on behalf of more than 100 survivors, argues that Shell’s carbon emissions contributed to climate change and worsened the impact of the storm. Typhoon Rai killed more than 400 people and left hundreds of thousands homeless.
Shell has said it disputes claims that individual companies can be held directly responsible for specific extreme weather events.
As energy firms navigate volatile markets, geopolitical risks and rising climate pressure, Shell’s latest results highlight both the resilience and the challenges facing the global oil and gas industry.
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