Oil giant Shell's quarterly profit has taken a hit, plunging to its lowest point in nearly five years. This comes as a shock to many, especially considering the company's strong operational and financial performance across the year. But here's where it gets controversial: while lower oil prices have forced European energy majors to make tough choices, Shell's CEO, Wael Sawan, claims that 2025 was a year of accelerated momentum.
The numbers tell a different story. Shell's adjusted earnings for the full year 2025 came in at $18.5 billion, a significant drop from the $23.72 billion annual profit it reported a year earlier. This is Shell's weakest quarterly result since the first three months of 2021, when adjusted earnings were $3.2 billion.
The company has announced a 4% increase in its dividend to $0.372 per share and a $3.5 billion share buyback program, marking the 17th consecutive quarter of $3 billion or more in buybacks. However, this move has raised eyebrows, especially given the challenging market environment and the industry's shareholder payouts at risk.
Shell's net debt stood at $45.7 billion at the end of last year, with gearing at 20.7%. This reflects an increase from net debt of $41.2 billion and gearing of 18.8% at the end of the third quarter.
As the oil industry navigates these turbulent waters, it will be interesting to see how Shell and its peers respond to the changing market dynamics. Will they continue with aggressive buybacks or adjust their strategies to better align with the current economic climate? The coming weeks will be crucial in determining the future trajectory of the industry.
