Shell was the undisputed leader of the Fortune 500 Europe list last year after Russia’s invasion of Ukraine supercharged energy markets and poured money into the coffers of oil and gas companies.

But what goes up must come down. Energy prices certainly did, dragging Shell with them and costing the London-headquartered company its lead among Europe’s biggest companies by revenue.

The energy giant still reported blockbuster results with $28 billion in profits in 2023, down 30% from the previous year’s record-breaking earnings. Shell also bumped up dividends to shareholders by 20% year over year in the final months of 2023, propelled by strong liquefied natural gas (LNG) demand that kept homes across Europe warm through the winter.

Shell had an eventful 2023 in other ways, too. Its new CEO, Wael Sawan, took over at the start of the year with the idea of steering the company through a cost-cutting and restructuring drive. He wanted the nearly 200-year-old company to focus on its best-performing projects while doubling down on oil and LNG output.

Shell is “focusing on its strengths, and LNG is clearly one,” said Christopher Kuplent, a European energy analyst at Bank of America. Shell’s lucrative gas division has represented the lion’s share of the company’s earnings in the past five years. He added that “LNG has not been a source of weakness” in a relatively tight oil market.

Nothing to be shell-shocked about

As part of his overhaul, Sawan scrapped some offshore wind and hydrogen projects, sparking concerns over whether the company’s transition to low-carbon fuels is taking a back seat. Shell renewables and energy solutions division spending declined by 23% last year, Reuters reported.

A wave of layoffs also impacted the company’s low-carbon business, among other areas.

Sawan’s strategy has differed from that of his predecessor, Ben van Beurden, who advocated for more comprehensive clean energy investments. In March, he weakened the company’s carbon reduction target for 2030 but kept Shell’s 2050 goal of achieving net-zero emissions intact.

To be sure, Shell has also axed some fossil fuel holdings, such as agreeing to sell its Bukom oil refinery in Singapore.

“What I think Wael [Sawan] has done is, he said, ‘There are no sacred cows. Everything needs to somehow earn a living in this organization, and if that means we’re going to end up as a smaller company in the future, then so be it,’” said Kuplent.

He added that Shell’s prudence is helping the company because it was operating in harsh macroeconomic conditions amid lackluster Chinese demand. It hasn’t been a sharp “green to brown” pivot for the energy giant, Kuplent said.

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During Shell’s annual general meeting this May, Sawan, who was previously the head of integrated gas and renewables and energy solutions, said that the company’s focus on “performance, discipline, and simplification” has allowed it to invest in the world’s energy while preparing for a low-carbon future.

Shareholders have responded positively to Sawan’s focus on high-margin projects, suspecting an increase in natural gas demand in the years to come. The energy major’s laser focus on returns has also prompted it to consider “all options,” including moving its listing from the U.K. to the U.S.

“The effectiveness of the new management’s strategic frugality and targeted pruning is already apparent,” Isabelle Zhang, an equity research analyst at AlphaValue, told Fortune. She pointed to $1 billion in structural cost reductions through divestments achieved last year. “Shell has been consistently outperforming its peers ever since Sawan became CEO.”

What future fortunes hold

Shell isn’t alone in leaning more toward oil and gas. BP, a British-headquartered energy giant ranked fifth on the Fortune Europe 500 list, also dialed down its climate targets last year as profits skyrocketed amid blistering energy prices (its profits doubled in 2022 as a result).

Energy companies remain dominant in Fortune’s ranking of Europe’s biggest companies, with TotalEnergies and BP joining Shell in the top five. The latest list includes 75 companies in the energy sector.

The current financial year might reverse Shell’s fate in the next edition of the Fortune 500 Europe rankings—equally because it’s thriving among energy players and because Volkswagen is encumbered by its internal tussles.

In September, the company announced that it was considering factory closures in Germany for the first time in its 87-year history—a move that hasn’t been well received by Volkswagen’s unions.

As lukewarm demand for electric vehicles and a struggling German economy weigh on Volkswagen, it may just pave the way for Shell to catapult back to the top spot.

This story was originally featured on Fortune.com