Shell, one of the world's largest oil companies, reported adjusted earnings of $23.72 billion for the full-year 2024, marking a significant decline from the previous year's $28.25 billion. The reduction in profits comes amid a cooling in oil prices and lower-than-expected global demand. Brent crude futures averaged $80 per barrel over the year, a decrease of approximately $2 compared to the previous year, according to the U.S. Energy Information Administration.
The drop in Shell's earnings follows record profits in 2022 when the company benefited from a surge in oil prices triggered by Russia's full-scale invasion of Ukraine. During the peak of this crisis, Brent crude prices soared to nearly $140 per barrel. However, analysts had anticipated Shell's full-year 2024 net profit to reach $24.71 billion, a figure that the company ultimately failed to meet.
Despite the challenges, Shell's shares have seen an increase of about 4.8% year-to-date. However, the company has adjusted its outlook for liquefied natural gas (LNG) production for the last quarter of 2024, signaling potential further challenges ahead. Additionally, Shell cautioned that trading results for its chemicals and oil products division are expected to be "significantly lower" on a quarterly basis.
In the final quarter of 2024, Shell reported weaker-than-expected adjusted earnings of $3.66 billion. This period was particularly impacted by the subdued performance in its trading divisions and the overall downturn in oil prices.