Shell’s Profits Surge on Windfall From Continuing Middle East Conflict

Shell’s Profits Surge on Windfall From Continuing Middle East Conflict

Thu, July 30, 2026 at 11:39 AM GMT+3 2 min read

• SHEL +1.35%

Shell's earnings continued to rise, aided by a strong trading performance and higher prices stemming from the conflict in the Middle East, enabling the energy major to maintain its quarterly buyback.

The British energy giant's second-quarter adjusted earnings—a closely watched metric that strips out certain commodity price adjustments and one-time charges—more than doubled on the same period a year earlier to a consensus beating $9.84 billion.

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Its $3 billion buyback matches its May tranche, when it scaled back from $3.5 billion, and marks the 19th consecutive quarter of at least $3 billion in repurchases. The substantial cash flow enabled Shell to simultaneously pay down debt.

The conflict in the Middle East has given oil majors an unexpected earnings windfall.

Trading desks have benefited from Iran's closure of the Strait of Hormuz—the vital waterway on the Persian Gulf through which a fifth of the world's oil and gas typically flows. Upstream units, which extract oil and gas, are posting bumper profits on higher prices as customers scrambled to replace the supply stuck in the Gulf. Now, those able to refine crude oil into diesel, jet fuel, and petrochemicals are benefiting from margins at all-time highs.

Shell's refineries operated at record levels over the quarter in a bid to fully capture the elevated margins. It increased its jet fuel volumes by 20% on the same period a year earlier to cash-in on the high premiums the fuel commanded after much of the world's supply was left locked in the Gulf.

The conflict has seen Shell lose roughly 10% of its total production due to damaged or shut-down assets in Qatar, where it owns the Pearl gas-to-liquids plant and has a 30% stake in a QatarEnergy LNG facility.

Shell is ready to resume operations at part of the undamaged plant once the situation in the Strait of Hormuz is resolved, its finance chief Sinead Gorman said.

The conflict hasn't altered Shell's long-term view on the attractiveness of Qatar. "This is a short term event," she said.

Shares were up 1.7% in morning trade.

Write to Adam Whittaker at adam.whittaker@wsj.com

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