Shell’s Q2 profit more than doubles to $9.8 billion, beats estimates

London: Shell’s net profit more than doubled from last year to $9.84 billion in the second quarter, beating expectations, driven by higher energy prices and increased market volatility during the Middle East conflict. Higher oil and gas prices, stronger liquefied natural gas (LNG) and oil trading and improved chemicals margins helped support the British major’s earnings, offsetting lower sales volumes resulting from cuts to its Qatar operations.

Analysts expected Shell’s adjusted earnings, a measure of net profit, according to the company’s consensus, to be $8.92 billion, compared with $4.26 billion a year earlier. Shell took advantage of market disruptions and volatility caused by the US-Israeli war with Iran, creating more opportunities for large commercial businesses operated by companies such as Shell, BP and TotalEnergies. Shell’s refineries were operating at 102% of capacity during the quarter to make the most of higher fuel prices, which helped jet fuel production rise by a fifth from a year ago, according to a Shell spokeswoman. ⁠Shall’s shares were up 1.6% as of 0821 GMT, outpacing the 0.4% gain in the European energy sector.

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HIGHEST PROFIT SINCE 2022

The profit in the quarter was Shell’s second-highest on record, surpassed only in the second quarter of 2022, when Russia’s invasion of Ukraine roiled global energy markets.

It reported its highest operating cash flow since 2022, including working capital movements. Still, he said he would keep the pace of the share buyback program at $3 billion over the next three months.

Profits from Shell’s integrated gas business, which includes the world’s largest LNG trading desk, were $2.7 billion, 55% above last year, easily beating expectations despite gas production falling 31% quarter on quarter. The chemicals and products unit, which houses the petroleum products trading desk, also beat expectations, posting the division’s highest quarterly profit since 2021, jumping from $118 million a year earlier to $2.3 billion.
Also Read: Shell increases LNG supplies to India, wins major fertilizer tenders after Gulf disruptionsShell forecasts integrated gas production of 570,000 to 630,000 barrels of oil equivalent per day in the third quarter, after 631,000 boed in the second quarter, and LNG liquefaction volumes of 7.1 million to 7.7 million tonnes, after 7.7 million tonnes in the second quarter. On the upstream side, production of between 1.68 million and 1.88 million boed is expected, reflecting increased maintenance activity following 1.82 million boed in the second quarter. Production at Shell’s Pearl gas-to-liquids facility in Qatar was halted in March after one of the facility’s two trains was damaged. Shell said repairs could take about a year, and in the meantime production in Canada, Nigeria and Australia is helping to make up for the loss of capacity.

The Middle East accounts for about 20% of Shell’s oil and gas production, or the equivalent of 550,000 barrels of oil per day, with Qatar accounting for about 10%. Shell’s net debt fell to $41.8 billion from $52.6 billion at the end of the first quarter of 2026. The debt-to-equity ratio, including leases, fell to 18.7% from 23.2% last quarter.

Brent crude oil averaged around $97 per barrel this quarter, while reference gas prices in Europe averaged 46 euros per megawatt-hour; both showed a sharp increase from the previous year.