Oil major Royal Dutch Shell posted a 70% fall in second quarter net profit, as oil prices and refining margins tumbled, but gains in foreign exchange has helped the company beat forecasts.

The world’s second-largest non government-controlled oil company by market value said that its second-quarter current cost of supply (CCS) net income was $2.34bn.

Excluding one-off items, the result was $3.15bn, compared with an average forecast of $2.55bn in a Reuters poll of eight analysts, the news agency reported.

Shell chief executive Peter Voser, who took office earlier this month, said that the company was “not banking on a quick recovery”.

“Our second quarter results were affected by the weak global economy. This weakness is creating a difficult environment both in upstream and downstream.

“Energy demand is weak. There is excess capacity in the market, and industry costs remain high,” Voser said in a statement.

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By GlobalData

Shell said that it achieved $700m in cost savings in the first half of the year compared with the same period in 2008, mainly due to cuts in senior management positions.

The company has also said that there are likely to be substantial further staff reductions.