Shell profits down nearly a third after fall in European gas prices

Europe's tumbling gas prices caused profits at Shell to slump by almost a third in the last quarter after denting the earnings in its gas trading business.

- Jillian Ambrose Graeme Wearden

Gas prices in Europe fell by almost a fifth between April and June after a ceasefire between Iran and Israel eased fears that oil deliveries via the strait of Hormuz might be disrupted by conflict.

The biggest weekly slump in gas prices in almost two years helped to dent Shell's adjusted earnings for the second quarter, which fell by almost a third from last year to $4.26bn (£3.22bn).

However, profits at Europe's largest fossil fuel company still beat City forecasts, which had predicted a larger drop in profits to $3.7bn, allowing Shell to continue handing out bumper payouts to its shareholders.

Shell attributed the drop in profits to "lower trading and optimisation margins" as well as lower prices for oil and gas. In addition to the fall in European gas prices, Brent crude was trading below $68 a barrel at the end of the quarter, down sharply from more than $86 a barrel a year earlier.