Global energy giant Shell has reported its strongest quarterly financial performance since 2022, posting a net profit of US$9.84 billion for the second quarter of 2026, more than double the earnings recorded during the same period last year and well above market expectations.
The impressive results were driven by a combination of higher global oil and natural gas prices, strong liquefied natural gas (LNG) trading, improved refining margins, and increased market volatility caused by the conflict in the Middle East, particularly the U.S.-Israeli war with Iran.
Analysts surveyed before the announcement had forecast Shell’s adjusted earnings at approximately US$8.92 billion, making the company’s performance significantly stronger than expected. During the same quarter in 2025, Shell posted adjusted earnings of US$4.26 billion.
Second-Highest Quarterly Profit in Company History
According to the company, the second-quarter earnings represent Shell’s second-highest quarterly profit ever, surpassed only by its record-breaking results in the second quarter of 2022, when Russia’s invasion of Ukraine sent global energy prices soaring.
The latest performance also delivered Shell’s strongest operating cash flow since that period, providing the company with additional financial flexibility despite ongoing geopolitical uncertainty.
Middle East Conflict Boosts Energy Markets
The company benefited significantly from sharp increases in global energy prices following heightened tensions in the Middle East.
The conflict disrupted energy markets and created significant trading opportunities for multinational oil companies with large commodity trading operations such as Shell.
Higher crude oil and natural gas prices, together with increased volatility in international energy markets, enabled Shell’s trading business to generate stronger returns.
The company’s extensive LNG trading operations also capitalised on fluctuating gas markets, further boosting earnings. Reuters
Refineries Operated Above Full Capacity
To take advantage of favourable fuel prices, Shell revealed that its refineries operated at 102 percent of their nameplate capacity during the quarter.
The higher utilisation enabled the company to significantly increase fuel production, with jet fuel output rising by approximately 20 percent compared to the same period last year.
The strong refining performance contributed substantially to improved profits within the company’s downstream business.
LNG and Chemicals Deliver Strong Results
Shell’s Integrated Gas division, which includes the world’s largest LNG trading business, generated profits of US$2.7 billion, representing a 55 percent increase from a year earlier.
This strong performance came despite the division experiencing a 31 percent decline in gas production during the quarter because of operational disruptions in Qatar.
Meanwhile, the company’s Chemicals and Products business recorded one of the biggest improvements.
Profits in the division surged to US$2.9 billion, compared with just US$118 million during the same quarter in 2025, supported by stronger refining margins and improved chemical market conditions.
Qatar Operations Still Recovering
One of the biggest operational challenges facing Shell remains damage to its Pearl gas-to-liquids facility in Qatar.
Production at one of the plant’s processing trains was halted in March after an attack damaged critical infrastructure.
Shell estimates repairs could take approximately one year, although production losses have been partly offset through increased output from operations in Canada, Nigeria and Australia.
The Middle East remains strategically important to the company, accounting for around 20 percent of Shell’s global oil and gas production, with roughly half of that linked to Qatar. Reuters
Stronger Balance Sheet
Shell also strengthened its financial position during the quarter.
The company’s net debt declined sharply from US$52.6 billion to US$41.8 billion, while its gearing ratio, a measure of debt relative to equity, fell from 23.2 percent to 18.7 percent.
The stronger balance sheet reflects robust cash generation during the quarter and continued financial discipline.
Share Buyback Maintained
Despite the exceptional earnings, Shell announced it would maintain, rather than increase, its existing US$3 billion share buyback programme over the next three months.
The company said it expects higher maintenance activity across some upstream and refining assets during the third quarter, which could temporarily reduce production levels.
Outlook
Looking ahead, Shell forecasts third-quarter integrated gas production of between 570,000 and 630,000 barrels of oil equivalent per day, while upstream production is expected to range between 1.68 million and 1.88 million barrels of oil equivalent per day.
Although maintenance work and the ongoing recovery of Qatar operations are expected to affect production, the company remains optimistic that strong global energy demand and its diversified portfolio will continue to support earnings.
The better-than-expected results were positively received by investors, with Shell shares rising in early trading, outperforming the broader European energy sector.