Shell and TotalEnergies reported that in the third quarter of 2023, they recorded net profits of $10.81 billion and $9.1 billion respectively. This profit has significantly increased compared to last year and reflects the positive impact of high energy prices due to the war and unprecedented refining margins.
Profit Increase and Share Buyback Plans
Shell increased its share buyback in this quarter to $5 billion, marking the second-largest buyback in the company's history. Additionally, TotalEnergies has announced plans to buy back another $2.5 billion of its shares in the fourth quarter of this year and $2.5 billion in the first quarter of 2027.
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This dividend distribution reflects the approach of oil companies in utilizing profits from the war between the United States and Israel with Iran, which is currently impacting global energy supply. The rise in energy prices has led to increased global inflation and higher input costs for industries.
Refining Sector Performance
Refining margins for both companies have nearly quadrupled compared to last year, reaching $42 for Shell and $33.2 for TotalEnergies. This increase in margins has contributed to revenue growth and resulted in the highest profits since 2022. Shell has also recorded a total shareholder return of 120% from December 30, 2022, to date.
Shell's net profit in the third quarter of this year was reported at $10.81 billion, exceeding analysts' expectations of $10.33 billion and nearly double last year's profit of $5.43 billion. Similarly, TotalEnergies reported its net income at $9.1 billion, more than double the $4 billion from last year and above the forecast of $8.3 billion.
Given the rising prices and unprecedented margins, these two major oil companies represent both positive developments and existing challenges in the global energy industry. Overall, the increase in prices and refining margins has enabled companies to achieve significant profits and implement share buyback programs.
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