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Shell profit surges as oil trading and refining margins boom
Wars in Ukraine, Middle East responsible for boost
Key Takeaways:
- Shell reported second-quarter adjusted net income of $9.8 billion, more than double a year earlier, as Middle East conflict boosted trading and refining results.
- The earnings beat topped analyst estimates as fuel margins surged, downstream earnings rose more than 700% and refinery utilization reached 102%.
- Shell expects no third-quarter production from Qatar, while repairs continue at its Pearl plant and the ARC Resources acquisition is set to close.
Shell Plc said second-quarter profit soared to the highest since the outbreak of the Ukraine war as conflict in the Middle East fuels a boom in trading and refining for the world’s energy majors.
Adjusted net income rose to $9.8 billion, more than doubling from a year earlier, London-based Shell said in a statement. That beat the $8.7 billion average analyst estimate compiled by Bloomberg. The company kept its $3 billion quarterly share buyback and said it would catch up on $1.2 billion of repurchases that were deferred during its acquisition of ARC Resources Ltd.
Shell’s earnings beat was “led by the strength of the downstream,” UBS analysts including Joshua Stone said in a note, pointing to stronger refining and trading after the conflict upended global energy markets.
The Iran war has given Europe’s largest energy company and other oil giants a significant short-term financial fillip, with the rewards from trading and refining far outweighing any disruption they’ve suffered. Having completed a multiyear period of cost cutting, streamlining and prioritizing shareholder returns, Shell CEO Wael Sawan now needs to show investors he can replenish the company’s long-term reserves base.
Shell rose 1.1% to trade at about 3,360 pence a share at 10:18 a.m. in London.
The quarter was dominated by heightened volatility across global energy markets after fighting between the U.S. and Iran disrupted oil and gas shipments through the Strait of Hormuz. As well as lifting the majors, the war also boosted the world’s top commodity merchants.
Shell's operational performance enabled very strong results during another quarter of severe disruption in global energy markets. More: https://t.co/28pGXDMY4d — Shell (@Shell) July 30, 2026
Fuel prices have soared far above crude oil, boosting margins, and trading has given European majors with vast operations an even bigger boost. The part of Shell that includes oil trading and refining reported adjusted earnings of $2.52 billion, an increase of more than 700% from the same period a year earlier.
Shell ran its refineries flat out. Their utilization rate stood at 102%, the highest since at least 2022. Globally, Shell said its jet fuel production was up 20% compared to the same quarter last year.
Those gains came despite one of the biggest disruptions in Shell’s recent history. Integrated gas production fell 31% compared to the same quarter last year, driven by disruption in Qatar. Shell is the world’s biggest LNG trader.
Global portfolio
Speaking on Bloomberg TV, Sawan said repairs are underway at the company’s Pearl gas-to-liquids plant, which was struck by a missile during the conflict. The facility is ready to restart once exports through the Strait of Hormuz can resume safely.
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Sawan
Damaged parts of the plant are expected to be repaired by the first quarter of next year, while unaffected units could restart as soon as shipping through Hormuz resumes, Chief Financial Officer Sinead Gorman said on a call with journalists. Even though she described the Qatari disruption as a “short-term event,” Shell’s outlook for the third quarter assumes no production from Qatar, underlining the uncertainty over when exports will resume.
The disruption also showed the breadth of Shell’s global portfolio. Record upstream production in Brazil, record refinery utilization and strong trading helped cushion the disruption in Qatar, demonstrating the company’s integrated business model.
The portfolio is also expanding. LNG Canada, Shell’s newest major project which came online last year, reached full production during the second quarter. Shell is also preparing to complete its acquisition of Canadian shale producer Arc Resources in the third quarter and is moving toward a decision on expanding LNG Canada.
