Profits at Norway’s state oil company nearly doubled to $11.5bn (£8.6bn) in the three months to the end of June as the jump in oil and gas prices caused by the war against Iran boosted earnings.
Equinor benefited from a decision to increase oil and gas production at the start of the conflict, filling a gap in the market after a near-halt to shipping through the strait of Hormuz caused Gulf oil flows to slump.
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.
Whil oil prices fell after the US and Iran signed a memorandum of understanding last month, they have begun rising again amid the resumption 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.
The increased production and higher energy prices almost doubled Equinor’s adjusted profits of $6.5bn it made in the April to June period last year. The company also passed analysts’ predicted profits of $11.37bn.
Oil prices rose on Wednesday 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 the interim ceasefire.
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 led to further rises in energy prices. “Brent crude has raced upwards again to trade around $93 a barrel, the highest level in six weeks,” said Susannah Streeter, the chief investment strategist at the investment platform Wealth Club.
“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.”
