Shell posts highest quarterly profit in four years as volatility boosts trading and refining

Shell reported its strongest quarterly profit since the second quarter of 2022, with adjusted earnings more than doubling to $9.84 billion from $4.26 billion a year earlier and beating the company-provided consensus estimate of $8.92 billion. The London-based energy major said extreme volatility linked to conflict involving the US, Israel and Iran lifted commodity prices, boosted trading and widened refining margins, helping its integrated gas and chemicals and products divisions post sharp profit gains. Chief Executive Officer Wael Sawan said Shell had built a business designed to perform in volatile markets, pointing to strong operations and trading. Integrated gas profit rose 55% year-on-year to $2.7 billion, while chemicals and products swung to a $2.3 billion profit from $118 million a year earlier. Brent crude climbed above $90 a barrel and reached $92.50 on Thursday as fears grew over disruption to the Strait of Hormuz, while stronger fuel prices pushed Shell to run refineries at 102% utilization, the highest since its reporting methodology changed in 2022. Cash flow from operations, including working capital movements, reached $21.4 billion, also the strongest since 2022. Net debt fell to $41.75 billion from $52.6 billion at the end of the first quarter, lowering gearing to 18.7%, below Shell's 20% comfort threshold. The company kept its 2026 capital expenditure outlook at $24 billion to $26 billion and left its $3 billion quarterly buyback unchanged for the next three months. The quarter also exposed operational risks from the same conflict-driven environment. Integrated gas output fell 31% year-on-year, largely because the Pearl gas-to-liquids facility in Qatar remains shut after a March attack damaged one of its two trains, with Sawan saying export capability may take roughly a year to restore. Investors are now watching how Shell uses the short-term windfall while rebuilding its longer-term reserve base.