Shell expects refineries to almost double the profit from every barrel of fuel made

Shell projects its refineries will generate nearly double the profit per barrel of fuel compared to previous periods, thanks to soaring global prices driven by supply shortages. In the July to September quarter, the company forecasts profit margins of $42 per barrel, significantly higher than $24 in the previous quarter and the previous peak of about $28 in mid-2022.

The sharp increase in refined fuel prices, particularly diesel, relative to crude oil costs is the main driver, as Middle East war-damaged refineries and Russia's shutdowns have caused severe supply disruptions. Shell's strong performance in the second quarter of 2026 resulted in a profit of nearly $10 billion, more than double the previous year's figures and its second highest quarterly earnings on record.

Despite oil prices falling from their spring 2026 peak of over $115 per barrel to around $100, Shell's market value surged to a record high of £36.23 per share, buoyed by European gas prices, which doubled and diesel prices hitting record highs. Shell operates among Europe's largest refineries with French energy firm TotalEnergies, who sees the crisis as an opportunity given their integrated model allows once seen liabilities to become goldmines.

European gas prices more than doubled to €70.50 (£60) per megawatt-hour in August, with prices jumping to almost €64/MWh in the third quarter. Shell's gas production had been severely impacted by the Iran crisis, which damaged a key Gulf gas processing facility, cutting prewar production by a third from 900,000 barrels of oil equivalent per day to about 740,000 to 780,000 BOED.

However, Shell anticipates production to rebound to around 570,000 to 630,000 BOED for the quarter, up from previous forecasts.