Shell Q2 profit more than doubles to $9.84bn as Iran war boosts trading and oil prices

Earnings surge

Shell on Thursday reported adjusted earnings of $9.84 billion for the second quarter of 2026, more than double the $4.26 billion it posted in the same period a year earlier. The figure, equivalent to €8.6 billion, was about 10% above the $8.92 billion consensus forecast compiled by the company and marked a 42% increase from the first quarter. It was the highest quarterly profit the British energy major has recorded since 2022. The adjusted earnings metric strips out one-off items and is closely watched by investors as a measure of underlying performance. A year earlier, Shell earned $4.26 billion, when oil and gas prices were lower and markets were calmer.

War-driven market disruption

The US-Israeli war with Iran has severely disrupted energy flows through the Strait of Hormuz, a critical conduit for global oil and LNG supplies. The conflict pushed crude and LNG prices sharply higher and injected unusual volatility into commodity markets. Shell's large trading operation was able to exploit the dislocations: price swings create wider spreads between buyers and sellers, more arbitrage opportunities, and increased demand for hedging from customers such as utilities and airlines. At the same time, elevated benchmark prices lifted the value of the company's own upstream oil and gas production. Rivals BP and TotalEnergies have also reported earnings windfalls from the same conflict, as the entire sector benefits from the supply disruptions.

Production hit but margins offset

While earnings jumped, Shell's physical output contracted. Gas production fell 31% from the previous quarter, primarily because of disruptions at the Pearl gas-to-liquids plant in Qatar, a facility affected by the regional fighting. The company said the war was the main reason for the production drop. The decline in volumes was more than compensated by the stronger trading result and improved refining and chemicals margins, both of which benefited from the same price and volatility environment. Improved chemicals margins added to the profit mix, reversing a period of weakness in that segment.

Shareholder returns maintained

Shell said it would keep its quarterly share buyback programme at $3 billion for the next three months. It also intends to complete an additional $1.2 billion in repurchases that were deferred from the prior quarter, when the company prioritised its acquisition of ARC Resources. The buyback had been trimmed to $3 billion in May, and Shell's shares have underperformed those of BP and TotalEnergies so far this year. The $3 billion quarterly pace is down from higher levels earlier in the year, reflecting a more cautious capital allocation stance.

CEO comments

Chief executive Wael Sawan attributed the strong results to the company's operational execution against a backdrop of severe market turmoil.

Our operational performance enabled very strong results during another quarter of severe disruption in global energy markets.