Norway’s national oil company profits double to $11.5bn amid war on Iran

Summary

Profits at Norway’s state oil company nearly doubled to $11.5bn (£8.6bn) in the three months to the end of June, as earnings were boosted by the jump in oil and gas prices caused by the US-Israel war on Iran. Equinor benefited from a decision to ramp up oil and gas production since the start of the conflict, filling a gap in the market after a slump in oil flows from the Gulf amid the throttling of shipping traffic through the strait of Hormuz. Equinor also profited from the jump in oil prices. Fears over a drop in global supplies left Brent crude prices swinging between $75 and more than $100 a barrel between April and June this year. That compares with roughly $60 to $70 during the same period last year. Oil prices, after falling following the signing of the memorandum of understanding between the US and Iran last month, have begun rising again amid the resumption and intensification of hostilities. Brent crude prices were up about 3.3% on Wednesday morning, London time, to roughly $94.30 per barrel. Equinor’s president and chief executive, Anders Opedal, said in a statement: “Strong production in the second quarter enabled us to capture value from higher prices, contributing to strong cashflow and financial results. “Reliable energy is important in a volatile world marked by heightened geopolitical tension. Our role is to deliver energy safely and efficiently every day,” he added. Increased production and higher energy prices pushed Equinor’s adjusted profits to $11.5bn for the April to June period, up from $6.5bn during the same period last year. The company also beat analysts’ expectations, having predicted profits of $11.37bn. The rising oil price on Wednesday came after the US military launched its 11th night of strikes on Iran, including on aircraft hangars and drone storage sites. The attacks have undermined hopes that diplomatic efforts can salvage an interim ceasefire deal. Yemen’s Iran-aligned Houthis, who control the coast at the mouth of the Red Sea, announced a naval blockade on Saudi Arabia, which has been relying on a pipeline to the Red Sea to get millions of barrels of oil out to market, given the Hormuz route remains restricted. The news had led to further spikes in energy prices. “Brent crude has raced upwards again to trade around $93 a barrel, the highest level in six weeks,” Susannah Streeter, chief investment strategist at the investment platform Wealth Club, said. “Risks to supplies are mounting again, with the effective blockage of the strait of Hormuz remaining a chokehold as tankers are stranded in and around the waterway, while risks to other crude routes are also intensifying.”