Shell delivered stronger-than-expected first-quarter results on Thursday, supported by resilient trading operations, stronger refining margins, and higher commodity prices, even as global energy markets were shaken by volatility tied to escalating conflict in the Middle East.
The London-based energy major reported adjusted earnings of $6.9 billion for Q1 2026, more than double the $3.3 billion posted in the previous quarter. Cash flow from operations excluding working capital reached $17.2 billion, although overall cash flow was weighed down by an $11.2 billion working capital outflow linked to surging commodity price volatility.
Chief Executive Wael Sawan said Shell’s integrated portfolio and operational performance helped the company navigate “unprecedented disruption in global energy markets.”
Shell also trimmed the pace of shareholder repurchases, announcing a new $3 billion share buyback program for the next three months, down from the $3.5 billion program launched in the previous quarter, even as it raised its quarterly dividend by 5% to $0.3906 per share. The company said the buyback program may be temporarily suspended during the shareholder approval process for its acquisition of ARC Resources.
The ARC acquisition remains central to Shell’s long-term strategy. The company said the deal would add roughly 370,000 barrels of oil equivalent per day and support a 4% production compound annual growth rate through 2030. Shell expects to spend roughly $4 billion on the acquisition this year as part of its projected 2026 capital expenditure budget of $24 billion to $26 billion.
Upstream operations generated adjusted earnings of $2.4 billion, benefiting from higher realized oil and gas prices. Integrated Gas earnings held steady at $1.8 billion despite lower production, aided by resilient LNG trading and long-term contract pricing structures.
Shell’s Chemicals & Products division was one of the strongest contributors during the quarter, reporting $1.9 billion in adjusted earnings as refining utilization climbed to 99% and trading margins improved sharply. Meanwhile, Marketing earnings rose to $1.3 billion on stronger lubricants performance and lower operating costs.
The company’s balance sheet weakened modestly during the quarter, with net debt rising to $52.6 billion from $45.7 billion at the end of 2025, reflecting both working capital impacts and higher lease liabilities. Gearing increased to 23%.
Shell warned that second-quarter production would likely be affected by the ongoing Middle East conflict, particularly disruptions tied to Qatar and broader regional instability. The company also expects weaker marketing margins and lower sales volumes in the current quarter.
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