Shell Posts $10.81 Billion Third-Quarter Profit as Refining Margin Hits a Record $42 a Barrel

Shell reported on Thursday its highest quarterly profit since 2022, as record refining margins and stronger gas results lifted third-quarter earnings to $10.81 billion. The result beat the average analyst estimate of $10.33 billion and was almost double the $5.43 billion earned a year earlier. The company’s shares rose 2.9% in early trade, according to Reuters.

The company’s global indicative refining margin rose to $42 a barrel, compared with $11.6 a year ago and $24 in the previous quarter. Reuters reported that war-driven energy prices helped the result, with the war between the United States and Israel and Iran, now in its ninth month, disrupting global energy supplies.

Gas and upstream results moved in opposite directions

Integrated Gas adjusted earnings increased to $3.04 billion from $2.69 billion in the second quarter, above expectations of $2.93 billion. Production rose to 772,000 barrels of oil equivalent per day from 631,000, mainly after Shell completed its $14 billion acquisition of ARC Resources on Sept. 2, adding about 370,000 barrels of oil equivalent per day of production. Liquefied natural gas liquefaction volumes declined to 7.4 million tonnes from 7.7 million tonnes because of planned maintenance, while LNG sales increased to 19.3 million tonnes from 18.0 million tonnes.

Upstream adjusted earnings fell to $3.19 billion from $3.49 billion, above forecasts of $3.10 billion. The decline reflected lower realized liquids prices, higher exploration well write-offs and unfavorable tax movements. Realized liquids prices averaged $84 a barrel, down from $89, while realized gas prices rose to $10 per thousand cubic feet from $8.30. Production averaged 1.80 million barrels of oil equivalent per day, compared with 1.82 million in the second quarter.

Buyback rises as spending guidance falls

Shell raised its quarterly share buyback to $5 billion from $3 billion, its second largest on record behind the $6 billion program launched in the second quarter of 2022. The company kept its quarterly dividend at $0.3906 per share and lowered its full-year 2026 cash capital spending guidance to $23 billion to $25 billion from $24 billion to $26 billion.

Cash flow from operations reached $21.04 billion, compared with $21.43 billion in the previous quarter, while free cash flow was $16.32 billion, down from $17.52 billion. Net debt declined to $39.73 billion from $41.75 billion at the end of June, reducing gearing to 16.6%. Chief Executive Wael Sawan credited strong operational performance for the results amid continued disruptions to global energy markets.

Marketing adjusted earnings declined to $1.16 billion from $1.33 billion on weaker mobility margins and lower lubricants volumes. The company also reached a final investment decision on LNG Canada Phase 2, which will double the plant’s capacity to 28 million tonnes per year, with commercial operations expected in the early 2030s. Shell is scheduled to report fourth-quarter and full-year 2026 results on Feb. 4, 2027.

Reporting based on coverage by Reuters and Oil & Gas Journal.