Shell CEO Wael Sawan indicated that the oil market is experiencing a "bit of oversupply," as he mentioned to Bloomberg Television. This comment comes as the company navigated a period where its fourth-quarter profit significantly declined due to various factors. Despite this, Sawan characterized 2025 as "by and large a very good year" for the oil major, attributing the fourth-quarter dip to tax adjustments and a downturn in its chemicals business.
Looking at the second quarter of 2025, Shell outperformed profit expectations even amidst softer market conditions. The company reported adjusted earnings of $4.3 billion, driven by strong performance in its upstream and integrated gas divisions. This was achieved despite weakening contributions from trading and chemical margins. Shell also generated robust cash flow from operations of $11.9 billion, which supported a new $3.5 billion share buyback program.
Shell's financial outlook for the third quarter of 2025 anticipates corporate adjusted earnings to be a net expense of approximately $500 million to $700 million. Full-year capital expenditures for 2025 remain guided between $20 billion and $22 billion. The company declared a second-quarter dividend of $0.3580 per share, payable on September 22. Weakness in the chemicals market is expected to persist for an extended period, according to Sawan, although crude oil trading activity is forecast to pick up later in the year.
The company continued its cost-cutting initiatives, achieving structural reductions of $800 million in the first half of 2025, with $500 million from operational streamlining. Cumulative cost cuts since 2022 now stand at $3.9 billion, progressing towards its $5 billion to $7 billion target by 2028. Total shareholder distributions for the period amounted to $5.7 billion, comprising $3.5 billion in completed repurchases and $2.1 billion in cash dividends. Shell confirmed another $3.5 billion in share buybacks, marking its 15th consecutive quarter of at least $3 billion in buybacks.
