Your commercial news round-up: Shell profits, UK speed limit cut, WH Smith closure, Amazon drone deliveries

Dimitar Dimitrov is a content and engagement coordinator at LawCareers.Net

Reading time: four minutes

Global economic aftershocks from the US‑Israel war with Iran are being felt across the UK, with soaring oil prices boosting energy giants’ profits and fresh calls for the government to cut speed limits to ease fuel costs. Elsewhere, weak consumer spending is pushing the former WH Smith high‑street chain towards store closures and Amazon has begun rolling out drone deliveries in the UK. Read on for LawCareers.Net’s picks of this week’s top commercial stories.

• Shell’s profits have surged in the first three months of the year after oil prices increased sharply following the outbreak of the US‑Israel war with Iran. The oil giant reported first‑quarter profits of $6.92 billion (£5.1 billion), beating analysts’ expectations and up from $5.58 billion a year earlier. Oil prices surged after the conflict led to the effective closure of the Strait of Hormuz, a route that normally carries about 20% of global oil and liquefied natural gas supplies. Before the conflict, brent crude traded at around $73 a barrel, later peaking above $120 and currently standing near $101. Shell chief executive Wael Sawan said: “Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets.” Meanwhile, rival firm BP also reported that its profits more than doubled over the same period.
  
  Environmental groups have been critical of the increase in profits, with climate campaigner at Friends of the Earth, Danny Gross, stating: “Once again, fossil fuel giants are pocketing monstrous profits while drivers are being squeezed at the petrol pump and households are set to pay higher energy bills. The answer is clear: strengthen the windfall tax on these indefensible profits and break our dependence on fossil fuels by powering our economy with homegrown renewables."
   
• The Institute for Public Policy Research (IPPR) has argued that Britain should cut speed limits to help protect consumers from rising fuel costs linked to the Iran war. The thinktank said capping speeds at 20 miles per hour (mph) in towns and cities and 60mph on motorways would reduce fuel demand and ease pressure from higher oil prices caused by the US-Israel war with Iran. The IPPR also urged ministers to temporarily cut fuel duty by 10p and introduce a new energy price cap of £2,000 a year. In addition, it warned that inflation could peak at 5.8% if no action is taken. Senior economist at the IPPR, William Ellis, said: “The UK cannot afford to sit back and let another energy shock drive up inflation and damage the economy. The UK economy and public finances are expected to take a significant hit from the Iran conflict, regardless of whether the government intervenes.” The thinktank argued that lower speed limits would also improve road safety and encourage walking and cycling, and “should be packaged with advice on how to drive more efficiently alongside recommendations for increased home working and carpooling”.
   
• Up to 150 former WH Smith high street stores are likely to close, placing thousands of jobs at risk, after their new owner outlined a radical restructuring plan. Modella Capital, which bought the 480-store chain for £76 million last year and rebranded it as TG Jones, cited “weak consumer spending” as it sought major rent concessions from landlords. Modella is seeking 100% rent holidays on about 100 outlets and 75% rent reductions on hundreds more for a year, followed by cuts of between 15% and 75%. Eight of the remaining 450 stores will close immediately, while the other stores could also close if landlords refuse the proposals, with staff told that between 100 and 150 sites are at risk. The chain employs about 5,000 people. Modella commented: “Weak consumer spending and cost of living pressures, combined with rising operating costs as a direct result of government policy and recent geopolitical events, have meant that the company as a whole has remained lossmaking.”
   
• Amazon has become the first retailer in the UK to launch a drone delivery service, beginning with a limited rollout in Darlington, County Durham. The service delivers packages weighing under 5lb (2.2kg) within a 7.5‑mile (12km) radius of Amazon’s local fulfilment centre. Items include everyday goods such as beauty products, batteries and cables. Deliveries are currently completed within two hours in the UK, with a maximum of 10 flights an hour or up to 100 deliveries per weekday. Amazon said the launch follows more than a decade of development and reflects demand for faster deliveries. However, Dr Anna Jackman of the University of Reading cautioned that expansion may be difficult: “A lot of our demand for delivery services are in urban centres. They are very densely populated, very congested. And the reality is [drone deliveries] don't work well in high-rise buildings."

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