Shell Nearly Doubles Quarterly Profit as Refining Margins Hit Record High

Shell almost doubled its quarterly profit from a year earlier, reporting adjusted earnings of $10.81 billion for the third quarter as record refining margins boosted results. The oil major published the figures on Thursday, saying geopolitical turmoil has pushed up crude prices and tightened fuel supplies.

Adjusted earnings, which the company uses as its measure of net profit, climbed from $5.43 billion in the same period last year. It was Shell's strongest quarterly profit since the second quarter of 2022, after Russia's full-scale invasion of Ukraine. Analysts had forecast $9.92 billion for July to September, according to a consensus compiled by LSEG.

Indicative refining margins reached $42 per barrel, far above the previous record of $28.04 per barrel set in the second quarter of 2022. The figure matched the forecast the company gave earlier in the month. Shell's London-listed shares rose about 3% in morning trading to an all-time high.

The company also raised its shareholder payouts, announcing a $5 billion share buyback program to run over the next three months, up from $3 billion in the previous quarter. Chief executive Wael Sawan pointed to strong operational performance amid "continued severe disruption to the global energy system."

Free cash flow rose to $16.3 billion from $10 billion a year earlier. Net debt stood at $39.7 billion, down from $41.75 billion in the prior quarter. Shell also lowered its 2026 capital expenditure outlook to a range of $23 billion to $25 billion, from $24 billion to $26 billion.

Maurizio Carulli, an equity research analyst for global energy and materials at Quilter Cheviot Investment Management, told CNBC the debt reduction was impressive because Shell had completed a $16.4 billion acquisition of Canadian energy firm ARC to increase production. He described the performance as strong across all divisions and said he expected further "small bolt-on acquisitions" rather than a major reshaping of the portfolio. Shell recently sold its Indian wind and solar business and is reportedly looking to sell its UK-based chemicals joint venture with Exxon.

France's TotalEnergies also gained from market conditions, more than doubling its adjusted net income to $9.1 billion in third-quarter results released on Thursday. Chief executive Patrick Pouyanne said oil trading was steady, while earnings were lifted by "historically high refining margins in Europe and worldwide."

Crude prices have swung sharply this year as Gulf exports were curtailed by the U.S.-Israeli war with Iran and attacks on ships in the Strait of Hormuz. Brent crude traded around $114 a barrel on Thursday, compared with about $65 a year ago, despite ongoing efforts to keep supplies flowing. Tensions in the Middle East remain high, with the U.S. and Iran reportedly considering a return to military strikes and Saudi Arabia hit by fatal attacks from Houthi militants.

A global shortage of refining capacity, worsened by strikes on Russian refineries, has pushed up prices for gasoline, diesel and jet fuel. Earlier this month, the Group of Seven nations agreed to release emergency diesel stocks as rising pump prices increasingly weigh on consumers.