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A Shell logo seen at a petrol station in London. A court in The Hague has ordered oil giant Shell to reduce its carbon emissions by 45% compared to 2019 levels by 2030, in what is widely seen as a landmark case.
SOPA Images | LightRocket | Getty Images

LONDON — Oil giant Royal Dutch Shell on Thursday reported stronger-than-expected second-quarter earnings, lending further support to the energy major’s plans to reduce net debt and reward investors.

The Anglo-Dutch company reported adjusted earnings of $5.5 billion for the three months through to the end of June. That compared with $638 million over the same period a year earlier and $3.2 billion for the first quarter of 2021.

Analysts had expected second-quarter adjusted earnings to come in at $5.1 billion, according to Refinitiv.

Shell boosted its dividend for the second consecutive quarter and announced the launch of a $2 billion share buyback program that it aims to complete by the end of the year.

The dividend rose to 24 cents in the second quarter, up 38% from the first three months of the year. It comes a year after the company moved to cut its dividend to shareholders for the first time since World War II.

“We have to make sure that our current shareholder base is pleased with what we do in terms of payouts,” Shell CEO Ben van Beurden told CNBC’s “Squawk Box Europe” on Thursday, reflecting on the firm’s plans to step up its shareholder distributions.

“We have to have a strong cash generative business that also funds the company for the future, but at the same time we have to build a business that is future-proof.”

The results reflect a broader trend across the oil and gas industry, as energy majors seek to reassure investors they have gained a stable footing amid the ongoing coronavirus pandemic. France’s TotalEnergies and Norway’s Equinor have also announced share buyback programs.

Share prices of the world’s largest oil and gas majors have not yet followed an improvement in the earnings outlook, however, and the industry still faces a host of uncertainties and challenges.

Shares of Shell were up over 3% during morning trade in London. The oil and gas company has seen its stock price rise more than 17% year-to-date, having collapsed almost 45% in 2020.

Investor skepticism

Shell’s financial results come as oil and gas prices took another step up in recent months. International benchmark Brent crude futures rose to an average of $69 a barrel in the second quarter, up from an average of $61 in the first three months of the year. The oil contract was last seen trading at $75.38.

Oil prices have rebounded to reach multi-year highs in recent months and all three of the world’s main forecasting agencies — OPEC, the International Energy Agency and the U.S. Energy Information Administration — now expect a demand-led recovery to pick up speed in the second half of 2021.

It follows a year in which the head of the IEA had suggested may come to represent the worst in the history of oil markets. The oil and gas industry was sent into a tailspin in 2020 as the spread of Covid-19 coincided with a historic fuel demand shock, plunging commodity prices, unprecedented write-downs and tens of thousands of job cuts.

Ahead of this earnings season, analysts had warned that while energy companies were likely to try to claim a clean bill of health, investors were expected to harbor a “tremendous degree” of skepticism about the business models of oil and gas firms over the long term. This was predominantly a result of the deepening climate emergency and the urgent need to pivot away from fossil fuels.

Court ruling

Earlier this month, Shell confirmed its intention to appeal a landmark Dutch court ruling ordering the company to take much more aggressive action to drive down its carbon emissions.

“We agree urgent action is needed and we will accelerate our transition to net zero,” Shell’s van Beurden said in a statement on July 20. “But we will appeal because a court judgment, against a single company, is not effective.”

“What is needed is clear, ambitious policies that will drive fundamental change across the whole energy system,” he added.

Members of the environmental group MilieuDefensie celebrate the verdict of the Dutch environmental organisation’s case against Royal Dutch Shell Plc, outside the Palace of Justice courthouse in The Hague, Netherlands, on Wednesday, May 26, 2021. Shell was ordered by a Dutch court to slash its emissions harder and faster than planned, dealing a blow to the oil giant that could have far reaching consequences for the rest of the global fossil fuel industry.
Peter Boer | Bloomberg | Getty Images

The Netherlands court ruled on May 26 that Shell must reduce its carbon emissions by 45% by 2030 from 2019 levels. That’s a much higher reduction than the company’s current aim of lowering its emissions by 20% by 2030.

The court ruling also said Shell is responsible for its own carbon emissions and those of its suppliers, known as Scope 3 emissions.

The verdict was thought to be the first time in history a company has been legally obliged to align its policies with the Paris Agreement. The accord, ratified by nearly 200 countries in 2015, is seen as critically important in averting the worst effects of climate change.

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IEA downgrades oil demand growth forecast as prices heat up on elevated Middle East tensions

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IEA downgrades oil demand growth forecast as prices heat up on elevated Middle East tensions

An oil pumpjack is shown near the Callon Petroleum vicinity on March 27, 2024 in Monahans, Texas. 

Brandon Bell | Getty Images

The International Energy Agency on Friday downgraded its forecast for 2024 oil demand growth, citing “exceptionally weak” OECD deliveries, a largely complete post-Covid-19 rebound and an expanding electric vehicle fleet.

In its latest monthly oil market report, the IEA said it had revised down its 2024 oil demand growth forecast by around 100,000 barrels per day (bpd) to 1.2 million bpd.

The global energy watchdog said that it expected the pace of expansion to decelerate even further to 1.1 million bpd next year “as the post-Covid 19 rebound has run its course.”

The IEA’s report comes amid a rebound in oil prices on elevated Middle East tensions, with energy market participants closely monitoring the prospect of supply disruptions from the oil-producing region.

Iran, which is a member of the Organization of the Petroleum Exporting Countries, has vowed to retaliate after it accused Israel of bombing its embassy in the Syrian capital of Damascus earlier this month.

The attack has ratcheted up tensions in a region already grappling with the ongoing Israel-Hamas war. Israel has not claimed responsibility for the attack.

International benchmark Brent crude futures with June delivery traded 0.8% higher at $90.45 per barrel on Friday at 9:30 a.m. in London, while U.S. West Texas Intermediate futures with May delivery rose nearly 1% to trade at $85.84 per barrel.

“We’re seeing the surge in [electric vehicle] sales, especially in China and also in Europe, really taking into gasoline demand, but also in the United States,” Toril Bosoni, head of oil industry and markets division at the IEA, told CNBC’s “Street Signs Europe” on Friday.

“There has been a lot of talk about sales not increasing as much as maybe was expected, but EV sales and increased fuel efficiencies in the car fleet is lowering gasoline demand, at least in advanced economies and particularly in China.”

Asked about some of the main concerns relating to oil supply security, Bosoni replied, “We are watching, obviously, the Middle East very closely. The continued tanker attacks in the Red Sea is of key concern, but also escalating tensions between Iran and Israel, and then we’re seeing tensions between Russia and Ukraine continue, with attacks on Russian refineries.”

“So, there are several tension points in the oil market today that we’re watching very closely that could have major impacts … if there would be any significant outages,” she added.

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Tesla unveils new Sport Seats to absorb Model S Plaid’s insane power

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Tesla unveils new Sport Seats to absorb Model S Plaid's insane power

Tesla has unveiled new Sport Seats for the Model S Plaid to absorb the electric supercar’s insane power better.

While it’s in the form of a family sedan, the Model S Plaid could easily pass as an electric supercar with its 1.99-second 0 to 60 mph acceleration.

That’s more power than anyone would need, but it is fun.

Some Model S Plaid owners even like to take the fun to the racetrack. When cornering, you can really feel the Gs on the racetrack.

Tesla’s Model S seats are comfortable, but they are not designed for super-spirited driving, which the rest of the vehicle enables.

Today, Tesla decided to address the issue with the release of new Sports Seats:

They obviously feature much more pronounced side support. Here are the main features of the seats:

  • Increased lateral support
  • Modular seat architecture for comfort & support, plus same 12-way power adjust, heating & ventilation
  • High performance suede for increased grip & reduced weight

Here’s another look at the new seats:

The seats are now standard for the $90,000 Model S Plaid and included on all cars built since the beginning of the month.

Electrek’s Take

We had known new sports seats were coming to the new Model 3 Performance, which is expected to be unveiled any day, but it makes sense that the Model S Plaid would get them first.

The vehicle’s level of performance deserves sports seats.

I am surprised that Tesla is making it standard rather than a paid option, but we’ll take it.

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Daily EV Recap: China looks to export EVs by the hundreds of thousands

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Listen to a recap of the top stories of the day from Electrek. Quick Charge is now available on Apple PodcastsSpotifyTuneIn and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded Monday through Thursday and again on Saturday. Subscribe to our podcast in Apple Podcast or your favorite podcast player to guarantee new episodes are delivered as soon as they’re available.

Stories we discuss in this episode (with links):

Formula E again delays debut of 600kW mid-race charging

This lamppost EV charger just went commercial in the US

Tesla releases more details on Powerwall 3, confirms cheaper stack coming

Electric cars are saving Americans billions — even people who don’t drive them

China is exporting so many EVs that it needs more ships – a lot more

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