Shell CEO, Wael Sawan, discusses half-year earnings, geopolitical uncertainty, the new U.K. government, and North Sea oil.
What Wael Sawan said
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Shell CEO Wael Sawan said volatility is the new normal for the energy system, but his company thrives through it via operational performance and strong trading. He distinguished healthy fundamentals-based volatility from dislocation-based volatility caused by Russian infrastructure damage, the effective closure of the Straits of Hormuz, and Red Sea restrictions. Sawan noted Shell's gas-to-liquids facility in Qatar had one train damaged and the other idle pending strait reopening, but diversification via LNG Canada and other sources offset losses, yielding $2.7 billion in integrated gas earnings. He urged long-term fiscal certainty for investors, noting 75% of UK energy demand remains fossil-based. Sawan confirmed Shell remains committed to the Aduro North Sea joint venture with Equinor. He highlighted safety of 2,500 employees in the region and said the energy system's shock absorbers are weakening, amplifying future supply shocks. He said the UK prime minister's office has reached out for discussions.
Key takeaways
Shell's integrated gas business earned $2.7 billion in the quarter despite Middle East disruptions.
One of Shell's two gas-to-liquids trains in Qatar was damaged; the other is ready but blocked by strait closure.
Sawan said 75% of UK energy demand is still fossil-based, arguing for indigenous production.
Shell remains committed to the Aduro North Sea JV with Equinor as its development vehicle.
0:56Is that volatility storing up larger problems for the oil industry in the fact that we are not going to be in fact energy industry more broadly because we're just not going to invest enough money because of that oscillation?
6:02Is there any thoughts of Shell re-entering as a principal player in places like Rosebank, Jack, what have you as well?
8:41Are you concerned that there is a problem which is almost silent that is building up which is going to create a medium to long-term problem for energy supply?
I've been in this job now for 15 quarters doing this thing. And what I would say is every single quarter when asked the question I would say volatility is the new normal. Volatility is what the energy system is going to have to grapple through and what we have been trying to build is a company that is able to thrive through volatility. So you're absolutely right. Of course the macro is such that the commodity prices are high and that provides a very strong tailwind for our results. But there are two key elements that we can control which we are continuing to deliver very, very well. One is outstanding operational performance and you see it across every one of our businesses which in itself underwrites the second and the second of course is a very strong trading and optimization as you referenced because we do have one of the world's largest and strongest trading capabilities and that allows us to be able to deal with that volatility in times like this while ensuring our customers get the products they need.
Yeah, there's a lot in that answer to unpack. So, we'll go through a few bits of it as well. Look, in terms of that vault as well, 15 quarters, I can't believe it's been that long already. But in terms of the vault, that is not good for whether it's NOCs, IOCs, whoever it may well be wanting to put in place long-term investments. Is that volatility storing up larger problems for the oil industry in the fact that we are not going to be in fact energy industry more broadly because we're just not going to invest enough money because of that oscillation?
Tough question to answer because volatility as we see it is broken down into call it fundamentals-based volatility and then there are more dislocation-based volatility. The fundamental based volatility is healthy. It sends the market signals. We see it for example in refined products where you go from a very strong price signal a couple of months ago for jet fuel. Now you're seeing the price signal coming through into areas like diesel and gasoline. But when you have dislocation-based volatility as we currently have the triple threat that we see from Russian infrastructure damage, the Straits of Hormuz's effective closure or for that matter the Red Sea restrictions, those are changing by the day and that does create a very difficult environment both for customers as well as for investors. What we continue to do though, Steve, is we look through this. We have to be able to continue to be a company that is thinking in decades but acting in days and weeks and months. And so what that means is we continue to go after the lowest cost resources, resources where we have particular advantages to develop and we continue to do what it is that we can control to be on the right end of the cost curve.
Well, it's Ben joining the conversation here. My understanding Shell the world's biggest LNG trader and the situation in the Middle East has really arguably hurt Shell more than others given the production decrease in the gas division. Just explain how much of an impact that's had and what you anticipate that you can do about that going forward.
So there are two key elements that the integrated gas division is facing. On the downside of course you are absolutely right Ben what you have there is stoppage essentially of our gas to liquids facility a major facility we have one of our two trains was damaged during the kinetic action the second one is ready to go but is subject to the opening of the straits we also have LNG interests there in Qatar now the flip side to that is of course as you rightly said we are the world's largest LNG player and a big part of our business model is significant diversity of supplies. And so places like LNG Canada, for example, that have started up just last year are now hitting full capacity. And that allows us to be able to substitute volumes that would have come out of Canadian volumes or our Peruvian volumes or Nigerian volumes and so on. And of course given where the macro is every molecule that's transported from one of those locations is delivering a higher return. And so what you find is our integrated gas business performed very well this quarter. $2.7 billion in earnings. A very strong quarter by all measures despite the significant headwinds of
And given the strong figures I suppose from the higher oil and gas price we've seen the volatility in that but you know just as recently as last week oil was back up at triple digits. How concerned are you that this draws the attention, say, of an incoming government in the UK that looks at the energy profits levy and thinks the oil and gas majors can contribute a little bit more for longer. What would you say to them?
What I would say is a couple of things. I think first and foremost policies need to be long-term that bring you stability and fiscal certainty irrespective of what government I speak to. My plea is always create an environment that your investors know what to expect irrespective of the cycles that will inevitably play out. I think the second bit is it's important to continue to recognize that as countries like the UK are rightly going after low-carbon solutions, renewables as much as possible. Oil and gas will continue to be a core part of the energy mix. In fact, today in the UK, 75% of the demand of energy is still fossil-based. And so during that period, while we are transforming the system to a lower carbon energy system, it is much better to be producing indigenous resources that are here both from a taxpayer perspective to be able to get the tax proceeds from it to be able to create jobs and to be able to have energy security in a world where I think energy security needs to be at a premium. And so those would be the key messages, Ben, that we continue to relay to anyone we speak, UK or beyond.
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Sawan, W. (2026, July 30). Shell CEO says the energy system is passing a major test [Interview transcript]. CNBC International Live. CEOInterviews.AI. https://ceointerviews.ai/interview/1142583/
MLA
Wael Sawan. "Shell CEO says the energy system is passing a major test." CNBC International Live, 30 Jul. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1142583/.
BibTeX
@misc{sawan2026_1142583,
author = {Wael Sawan},
title = {Shell CEO says the energy system is passing a major test},
howpublished = {Interview transcript, CNBC International Live. CEOInterviews.AI},
year = {2026},
month = {jul},
url = {https://ceointerviews.ai/interview/1142583/},
note = {Speaker-attributed transcript with timestamps}
}
