British oil and gas giant Shell Plc has reported a 23% decline in net profit for the first half of 2025, attributing the dip to falling global energy prices and a less favourable macroeconomic environment. The company disclosed this in its half-year financial report released on Thursday, July 31.
Shell’s profit after tax fell to $8.4 billion, compared to $10.9 billion recorded in the same period in 2024, marking a sharp year-on-year decline. Group revenue also contracted by 8.9%, dropping from previous highs to $136.6 billion.
The decline reflects the broader impact of market volatility, including weaker demand projections and a global oil surplus. The company noted that “lower realised liquids and gas prices” played a significant role in the profit slump. These trends, it said, are tied to a cooling economic outlook, influenced in part by the re-introduction of trade tariffs by U.S. President Donald Trump and increased oil production by OPEC+ countries.
Shell’s Chief Executive Officer, Wael Sawan, acknowledged the company’s struggles within what he described as “a less favourable macro environment.” Despite these challenges, Sawan emphasized that the company remains focused on delivering value to shareholders while navigating ongoing market uncertainties.
“Our performance in the first half of the year reflects a disciplined approach to capital allocation and a strong commitment to shareholder returns, even in the face of economic headwinds,” Sawan stated.
In a bid to bolster investor confidence, Shell announced a $3.5 billion share buyback programme, set to commence as markets reopened in London. The move aligns with the company’s strategy to return excess capital to shareholders despite lower earnings and revenue.
Industry analysts suggest the buyback announcement may cushion the impact of reduced profits on Shell’s stock performance. The energy major has historically relied on stock repurchases and dividends to maintain shareholder appeal.
The global energy market has seen a noticeable shift since early 2025. Oil and gas prices began to dip due to a combination of geopolitical concerns and increased supply. Notably, OPEC+ producers ramped up output in recent months, further pressuring prices amid fears of a global economic slowdown triggered by rising trade tensions.
Analysts also attribute the downturn in prices to weakened demand across Asia and Europe, where slower manufacturing activity and green energy transitions are dampening fossil fuel consumption.
Shell’s earnings report coincides with growing concerns about the trajectory of the global economy. As the world adjusts to rising inflation, trade disruptions, and shifting energy policies, major oil companies like Shell are being forced to adapt to a more complex operational landscape.
Still, Shell maintains a strong balance sheet and remains one of the most profitable players in the global energy space. Its diversified portfolio, which includes growing investments in renewable energy, may offer a buffer against future oil market instability.