LONDON, Oct 29 – Shell reported its highest quarterly profit since 2022 on Thursday and raised its share buyback programme to $5 billion, as war-driven energy price movements and record refining margins boosted earnings above market expectations.
The oil major posted third-quarter net profit of $10.81 billion, exceeding analysts’ average forecast of $10.33 billion and nearly doubling the $5.43 billion recorded in the same period a year earlier.
The US-Israeli war with Iran, now in its ninth month, has disrupted global energy supplies and contributed to a sharp increase in refining profitability. Shell’s refining margin reached a record $42 per barrel, compared with $11.60 a year earlier and $24 in the previous quarter.
The company increased its quarterly share buyback from $3 billion to $5 billion. The programme ranks as Shell’s second-largest on record, behind the $6 billion buyback launched in the second quarter of 2022.
Shell shares rose 2.9% in early trading, outperforming a 0.7% gain in a broader index of European energy companies.
Gas and upstream earnings exceed forecasts
Shell’s integrated gas business generated $3.04 billion in earnings, above analysts’ expectations of $2.93 billion. Upstream earnings reached $3.19 billion, also exceeding the forecast of $3.10 billion.
Cash flow from operations, excluding working capital movements, increased to $21.7 billion from $12.24 billion a year earlier, surpassing analysts’ estimate of $18.18 billion.
The results reflect stronger profitability across key parts of Shell’s business, particularly refining, despite production disruptions in the Middle East.
Middle East conflict weighs on production
Oil and gas output fell 17% in the first nine months of 2026 compared with the same period a year earlier, mainly because the conflict in the Middle East reduced production volumes from Qatar.
Liquefied natural gas (LNG) liquefaction volumes, however, rose 12%, supported by the ramp-up of LNG Canada. That growth was partly offset by the disruption to operations in Qatar.
Production at Shell’s Pearl gas-to-liquids facility in Qatar was halted in March after an attack on Ras Laffan Industrial City damaged one of the plant’s two processing trains. Shell has partially restarted operations, but the company has said repairs could take about a year.
Shell also recorded $5.4 billion in non-cash increases in the variable component of shipping leases, reflecting the prevailing economic environment. Trading in its chemicals and products segment, which includes its major oil trading operation, was lower than in the exceptionally strong second quarter, partly because of non-cash timing effects.
Asset impairments affect reported performance
Shell booked $2.5 billion in pretax impairments, mainly associated with a European biogas asset after management reduced its expectations for market development.
These charges were partly offset by $1.8 billion in pretax impairment reversals on a North American asset within the integrated gas segment. The reversals followed changes to commercial terms and the final investment decision on LNG Canada Phase 2.
The adjustments reflect differing commercial outlooks across Shell’s portfolio, as the company continues to develop its LNG operations while reassessing the prospects of some lower-carbon investments.
Shareholder returns and capital discipline
According to Shell data, the company delivered a 120% total shareholder return, including reinvested dividends, between December 30, 2022, and the period covered by its latest results. This exceeded BP’s 78%, TotalEnergies’ 84%, ExxonMobil’s 89% and Chevron’s 51%.
Investors have been monitoring how major oil companies allocate the windfall profits generated by the conflict, particularly whether higher earnings will lead to increased capital expenditure or larger shareholder distributions.
The sector has pledged to maintain capital discipline during one of the most profitable periods for global oil producers in recent memory. Shell’s decision to increase its buyback to $5 billion signals a greater allocation to shareholder returns, while its production disruptions and asset adjustments highlight the operational and investment challenges facing the company.
