Royal Dutch Shell has blamed weaker oil and gas markets for delaying the world’s largest share buyback scheme after its profits halved in the final quarter of the year.

The Anglo-Dutch oil giant made a profit of $2.9bn (£2.23bn) in the last three months of 2019, down from $5.7bn in the final quarter of 2018, when fears of a slowdown in the global economy caused oil prices to slump.

For the year as a whole, profits fell 23% to $16.5bn, in a blow to the oil company’s plans to complete a $25bn share buyback programme by the end of this year.

The company blamed weaker oil and gas prices, which drifted down last year due to a well-stocked global market and concerns over worldwide economic growth that dampened demand for fossil fuels.

Shell’s worse than expected results confirmed investor fears that its plan to hand back $25bn to investors who had accepted shares in lieu of dividends in recent years would be delayed.

The company’s share price tumbled after the announcement by almost 4% to £20.52, the lowest level in two and a half years.

Ben van Beurden, Shell’s chief executive, said the company faced “challenging macroeconomic conditions” in its petroleum refining and chemicals business, “as well as lower oil and gas prices” last year.

The global oil price averaged $64.36 a barrel last year, down sharply from an average of just over $71 a barrel in 2018. It was trading at $58.78 on Thursday.

Shell was also hit by a slide in global gas prices from an average of $2.59 per million British thermal units (MMBtu) last year from $3.13 per MMBtu in 2018.

Shell has said it needed oil prices to be above $65 a barrel in 2019 and $66 a barrel in 2020 to afford payments on its giant debt pile and the cost of buying back shares from its investors by the end of 2020.

Oil industry analysts expect the year-end target for share buybacks to take a back seat to Shell’s desire to pay off its debt.

Shell has spent $15bn buying back shares so far and said it would buy back $1bn of shares over the next three months, down from $2.75bn in the preceding three months.

“It now looks extremely challenging to complete the programme by year end,” analysts Redburn said.

Shell raised fears of a delay to the programme after warning investors late last year that it would take a $2.3bn hit in the fourth quarter due to a weaker global economy.

Other major oil companies including Chevron, BP, Repsol and Equinor have all written off billions of dollars due to a slump in US shale prices.