Shell Q2 profit more than doubles on Middle East conflict

Shell ↗ 1.58% on Thursday reported second-quarter 2026 adjusted earnings of $9.84 billion, more than doubling the $4.26 billion posted a year earlier and comfortably surpassing analyst expectations, as the British energy major benefited from higher oil and gas prices driven by the ongoing Middle East conflict.cnbc+1

The result beat a company-provided analyst consensus of $8.92 billion and a separate LSEG-compiled forecast of $8.79 billion, according to CNBC. Shell had reported $6.92 billion in adjusted earnings in the first quarter of 2026, meaning profits jumped more than 40% sequentially as well.cnbc

War-Fueled Volatility Drives Results

The earnings surge was underpinned by higher realised prices, stronger LNG and crude trading, improved refining and chemicals margins, and record upstream production in Brazil and record refinery utilisation. Shell's upstream realised liquids price rose to $89 per barrel from $72 in the prior quarter, while gas prices climbed to $8.30 per thousand standard cubic feet from $6.90.theglobeandmail

The gains came despite lower production volumes caused by disruptions to Shell's Qatar operations during the conflict. Total integrated gas production fell to 631,000 barrels of oil equivalent per day from 909,000 in the first quarter, while the company's Pearl GTL site in Qatar has been offline since March.mirror+1

Shell's chemicals division posted its best adjusted earnings since the third quarter of 2021, with global indicative chemical margins nearly doubling to $270 per tonne.theglobeandmail

Cash Generation and Shareholder Returns

Operating cash flow reached $21.4 billion for the quarter, supported by a $3.4 billion working capital inflow, while free cash flow hit $17.5 billion. Net debt fell sharply to $41.8 billion from $52.6 billion at the end of the first quarter, bringing gearing down to 18.7%.investing+1

Shell announced it would resume its share buyback programme with $3 billion in new repurchases plus $1.2 billion carried over from a programme paused in connection with the $13.6 billion acquisition of ARC Resources, which received shareholder approval in mid-July and is expected to close in the third quarter.theglobeandmail+1

CEO Wael Sawan said: "Shell's operational performance enabled very strong results during another quarter of severe disruption in global energy markets, as we worked hard to provide critical energy supplies and products to our customers."theglobeandmail

Criticism Amid Energy Crisis

Environmental groups condemned the results. Greenpeace political campaigner Rudy Schulkind called the profits "obscene," while Global Witness senior campaigner Flossie Boyd said the earnings were "a shocking reminder of who really benefits from our dependence on fossil fuels."mirror

Shell's London-listed shares have risen around 21% so far this year, though the company trails peers including BP ↗ 3.23%, TotalEnergies ↗ 2.03%, Exxon Mobil ↗ 1.59%, and Chevron ↗ 1.53%.cnbc