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

Profits at Norway’s state oil company almost doubled to $11.5bn (£8.6bn) in the three months to the end of June as a rise in oil and gas prices caused by the war against Iran boosted earnings.

Equinor, the UK’s largest gas supplier, benefited from the decision to increase oil and gas production at the start of the conflict, filling a gap in the market after oil flows in the Gulf decreased after shipping through the Strait of Hormuz came to a near halt.

Equinor also profited from the rise in oil prices. Fears about a decline in global supply caused Brent crude oil prices to fluctuate above $75 to $100 per barrel between April and June this year. That’s up from roughly $60 to $70 during the same period last year.

While oil prices fell after the memorandum of understanding signed by the USA and Iran last month, they started to rise again with the resumption of hostilities. Brent crude oil prices rose as high as $95 per barrel on Wednesday, then fell to $94, up 3% on the day.

Anders Opedal, president and chief executive of Equinor, said: “Strong production in the second quarter enabled us to capture value at higher prices and contributed to strong cash flow and financial results.

“In a volatile world marked by increasing geopolitical tension, reliable energy is essential. Our role is to distribute energy safely and efficiently every day,” he added.

Rising production and higher energy prices have nearly doubled Equinor’s $6.5 billion adjusted profit from April to June last year. The company also beat analysts’ forecasts of $11.37 billion in profits.

Meanwhile, climate campaign group Uplift criticized Equinor for “making billions in profits while millions of people in the UK struggle with unaffordable energy bills”.

The Norwegian state oil company is also “pressing” the UK government to approve production at the Rosebank oil field off the coast of the Shetland Islands “to keep profits flowing”, its executive director Tessa Khan said.

“Rosebank won’t cut our bills – it’s largely oil for export – but it will make Equinor and its part owner the Norwegian government even richer.” Khan called on Britain’s new prime minister, Andy Burnham, to increase renewable energy production and “put the public’s need for affordable energy and a safe climate ahead of the profits of this Norwegian oil giant and reject Rosebank”.

This comes amid further increases in oil prices on Wednesday after the US military launched its 11th night strike against Iran. including aircraft hangars and drone storage areas. The attacks undermined hopes that diplomatic efforts could salvage the temporary ceasefire.

Yemen’s pro-Iran Houthis, who control the coast at the mouth of the Red Sea, announced that they would impose a naval blockade on Saudi Arabia, which relies on a pipeline to the Red Sea to bring millions of barrels of oil to market because the Hormuz route remains limited.

The news led to a further increase in energy prices. “Brent crude is on the rise again to trade around $93 a barrel, a six-week high,” said Susannah Streeter, chief investment strategist at investment platform Wealth Club.

“Risks to supplies are increasing again due to the effective blockage of the Strait of Hormuz, with tankers stranded in and around the waterway, while risks to other crude oil routes are also intensifying.”