Shell set for another bumper quarter as traders cash in on surging energy prices

Shell is on track for another bumper quarter as the Middle East continues to drive major swings in energy prices and deliver a windfall for energy giants. 

The FTSE 100 firm said third-quarter oil and gas trading was in line with the previous three months, when they helped deliver Shell’s second-highest quarterly profit on record. 

It has been driven by refining margins at $42 a barrel, almost double the $24 a barrel in the second quarter.  

Refining margins show the difference between what it costs to turn crude oil into fuel and the price those fuels are then sold for.

Shell also told investors it had upped its outlook for gas production for the third quarter. It is forecasting integrated gas production to reach between 740,000 and 780,000 barrels of oil equivalent per day (BOED) between July and September 2026. 

This is higher than the 570,000 to 630,000 BOED range the group previously forecasted.  

It would also mark an increase from the 631,000 BOED produced in the second quarter, which was impacted by war in the Middle East damaging output from Qatar. 

Third-quarter liquefied natural gas production is expected to be around 7.2 million to 7.6 million metric tons, compared with a previous forecast of 7.1 million to 7.7 million tons and second-quarter output of 7.7 million tons.

The integrated gas outlook includes Shell’s $16.4 billion acquisition of Canadian energy company ARC Resources, which was completed on September 2, the company said.

Elsewhere, chemicals margins weakened and marketing earnings are guided lower. A roughly $2.5 billion cash outflow for German emissions certificates will hit operating cash flows. 

Major oil firms have cashed in on soaring Brent crude prices since Iran closed the Strait of Hormuz in February. 

At the same time, diesel drivers across the UK are now facing an average of £2 a litre at the pumps, representing another record high at forecourts. 

According to the latest RAC Fuel Watch data, a 55-litre tank of petrol now costs £96.09, which is £23.03 more than before war in the Middle East began. 

Filling the same-sized tank with diesel costs £110.01, up £31.70 compared with February 28, RAC Fuel Watch said.

Shares in Shell rose 0.38 per cent or 14.00p to 3,665.00p, having risen more than 30 per cent in the past year.    

In July, Shell said its profits for the second quarter had more than doubled after the war across the Middle East pushed up oil prices. 

The oil giant posted profits of $9.84billion for the April-to-June period, up from $4.26billionn at the same point the previous year. 

Garry White, chief investment commentator at Raymond James, said: ‘The company comfortably beat market expectations in the second quarter, and this latest update indicates a further earnings beat could be on the cards in the September quarter too.

‘The statement reinforces the benefits of Shell’s integrated business model, which enables it to capture value across the energy chain during periods of market volatility.

‘While the chemicals division remains challenging and the group faces some one-off charges, the overall tone of the update was positive.’