Shell’s quarterly profit nearly doubles as refining margins hit record high

The energy major’s global indicative refining margin surged to $42 a barrel, nearly twice the $24 a barrel posted in the prior quarter and a record for the company. Shell had already signaled this sharp jump earlier in the month.

Management pointed to a volatile pricing backdrop, robust trading operations, and strong oil and gas sales as the main drivers, on top of the unprecedented refining margins. Margins across the refining industry have widened since mid-year as supply interruptions from the Middle East and Russia’s halt on diesel exports squeezed global fuel availability, with refiners unable to make up for roughly 7 to 8 million barrels a day of missing refined product.

Shell chief executive Wael Sawan said the firm’s emphasis on operational execution had produced solid outcomes despite ongoing major disruptions affecting the worldwide energy system.

Following the results, Shell lifted its share buyback target to $5 billion, up from the $4.2 billion unveiled alongside second-quarter figures, which has since been fully executed. Completion of the enlarged buyback is anticipated before Shell releases its fourth-quarter figures early next year.

Shell was not the only European energy giant to post standout quarterly figures: Equinor of Norway disclosed a tripling of adjusted net income a day earlier, also pointing to strong refining margins plus elevated oil and gas prices and greater hydrocarbon volumes.

Why it matters for markets: The record refining margins and firmer LNG and gas prices signal persistent tightness in global fuel supply, a dynamic that could keep energy costs elevated and shape Brent crude and natural gas pricing. Strong Shell third-quarter earnings and an enlarged buyback also tend to bolster sentiment toward energy-sector shares.

Source: OilPrice.com