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Shell sees refining margins hitting record high in third quarter - Finance news and analysis from Global Banking & Finance Review
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Shell sees refining margins hitting record high in third quarter

Published by Global Banking & Finance Review

Posted on October 7, 2026

2 min read

· Last updated: October 7, 2026

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Shell Expects Record $42/bbl Refining Margins and Strong Q3 Gas Production

Shell's Third-Quarter Performance and Market Impact

Record Refining Margins

Oct 7 (Reuters) - Shell expects third-quarter refining margins to jump to $42 a barrel, a record high and sharply above $24 a barrel in the previous quarter, the oil major said on Wednesday.

Impact of Global Events on Oil Prices

Global benchmark Brent crude prices surged after the US and Israel attacked Iran in late February, prompting Tehran to effectively shut the Strait of Hormuz and attack Gulf neighbours.

Oil Companies' Windfall

Major oil companies are expected to reap a multibillion-dollar windfall from the conflict as higher energy prices boost revenues.

Shell's Trading and Production Outlook

Results from Shell's large gas and oil products trading businesses are expected to be in line with the previous quarter, when they helped the company deliver its second-highest quarterly profit on record.

Integrated Gas Production Forecast

Shell raised its third-quarter integrated gas production forecast to between 740,000 and 780,000 barrels of oil equivalent per day, from a previous estimate of 570,000 to 630,000 boed.

The company produced 631,000 boed in the second quarter, compared with more than 900,000 boed before the Iran war.

Liquefied Natural Gas Production

Third-quarter liquefied natural gas production is expected to be around 7.2 million to 7.6 million metric tons, compared with a previous forecast of 7.1 million to 7.7 million tons and second-quarter output of 7.7 million tons.

Acquisition Impact

The integrated gas outlook includes Shell's $16.4 billion acquisition of Canadian energy company ARC Resources, which was completed on September 2, the company said.

Upstream Production and Refinery Utilisation

Shell also narrowed its third-quarter upstream production forecast to between 1.74 million and 1.84 million boed, from a previous expectation of 1.68 million to 1.88 million boed. 

Refinery utilisation at Shell's chemicals and products unit, which includes its large oil trading business, is expected to be lower in the third quarter than in the second quarter because low Rhine water levels are affecting utilisation at its Rheinland refinery.

Reporting Credits

(Reporting by Yadarisa Shabong in Bengaluru and Shadia Nasralla in London. Editing by Nivedita Bhattacharjee and Mark Potter)

Key Takeaways

  • Shell anticipates its Q3 refining margins will reach an unprecedented USD 42/bbl—up from USD 24/bbl in Q2, fueled by surging energy prices amid Middle East conflict. (Reuters & EIA context)
  • Global refining margins have exploded amid tight product markets—gasoline margins more than doubled and distillate/jet cracks nearly tripled year-on-year in 3Q 2026. (EIA; IEA)
  • Shell raised its Q3 integrated gas production forecast (740k–780k boe/d) and narrowed upstream guidance (1.74–1.84 m boe/d), aided by its USD 16.4 b ARC Resources acquisition. (Reuters)

Frequently Asked Questions

What refining margins does Shell expect in the third quarter?
Shell expects third-quarter refining margins to rise to a record $42 a barrel, up from $24 per barrel in the previous quarter.
How were Shell’s profits impacted by rising oil prices?
Higher oil prices, driven by Middle East conflict, are expected to boost Shell’s revenues and result in significant windfall profits.
How did the acquisition of ARC Resources affect Shell’s gas outlook?
The gas outlook includes Shell’s $16.4 billion acquisition of ARC Resources, completed on September 2.
Why is refinery utilisation expected to be lower at Shell’s Rheinland refinery?
Low Rhine water levels are affecting refinery utilisation at Shell’s Rheinland refinery, leading to lower third-quarter output.

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