Shell reported that its third-quarter refining margins are expected to reach $42 a barrel, nearly double second-quarter levels, driven by global fuel shortages and geopolitical disruptions. The energy major announced the updated outlook ahead of full financial results scheduled for publication on October 29, 2026.
Shell plc projected that its third-quarter refining margins will climb to $42 a barrel for the July-to-September period according to reporting from The Guardian in a market update published on October 7, 2026. That figure marks a dramatic leap from the $24 a barrel recorded in the second quarter, comfortably eclipsing the previous high of about $28 a barrel set in mid-2022.
Refining Margins Surge On Fuel Squeezes
Squeezed supplies stem directly from the shutdown of war-damaged refineries across the Middle East and Russia, reflecting a steep increase in the price of refined products—most notably diesel—relative to the cost of crude oil. The diesel price premium over global benchmarks jumped above $100 a barrel for the first time, signaling record-high profits from processing crude into usable fuels as detailed by The Guardian. A representative of a French energy company noted at an industry conference in London that facilities once viewed as financial liabilities are suddenly becoming goldmines
as reported by The Guardian.
Shell also lowered its indicative chemicals margin from USD 270.00 to USD 208.00 per tonne, representing a 22.96 percent decline. Adjusted earnings reached USD 9.80 billion and cash flow from operations exceeded USD 21.00 billion in the second quarter of 2026. The same results presentation outlined a cash capital expenditure outlook of USD 24.00 billion to USD 26.00 billion for fiscal year 2026 alongside a USD 3.00 billion share buyback program. Barclays raised its price target for Shell from GBp 4,700 to GBp 4,950 on October 5, 2026, maintaining an overweight rating.
Middle East Oil Flows Recover to Prewar Levels
The update also detailed cash flow movements, and these payments have historically occurred in the fourth calendar quarter noted Securities.io.
| Metric Category | Q2 2026 Actual | Q3 2026 Updated Outlook |
|---|---|---|
| Indicative Refining Margin | $24/bbl | $42/bbl |
| Indicative Chemicals Margin | $270/tonne | $208/tonne |
| Integrated Gas Production | 631 kboe/d | 740 – 780 kboe/d |
| Upstream Production | 1,824 kboe/d | 1,735 – 1,835 kboe/d |
| LNG Liquefaction Volumes | 7.7 MT | 7.2 – 7.6 MT |
Shell Chief Executive Officer Wael Sawan noted that oil flows from the Middle East have recovered to about 80% of prewar levels reported Moneycontrol, even as regional conflict continues to deplete major market inventories.
