Shell third quarter 2026 update note

Higher indicative refining margins contrast with lower chemicals margins and an expected emissions-certificate payment outflow.

Rhea-AI Summary

Shell (SHEL) updated its third-quarter 2026 outlook, including the ARC Resources acquisition completed on September 2, with results due October 29. Shell expects Integrated Gas production of 740–780 thousand barrels of oil equivalent per day, versus 631 thousand in Q2, and liquefied natural gas volumes of 7.2–7.6 million tonnes, versus 7.7 million. Upstream production is forecast at 1,735–1,835 thousand barrels of oil equivalent per day, versus 1,824 thousand.

The indicative refining margin rises to $42 per barrel from $24, while the chemicals margin falls to $208 per tonne from $270. Refinery utilisation is forecast at 93%–97%, versus 102%, with low Rhine water levels affecting Rheinland. Shell expects lower Marketing adjusted earnings and an approximately $2.5 billion cash outflow for German emissions certificates. Renewables and Energy Solutions adjusted earnings are forecast at $0.0–$0.4 billion; Corporate adjusted losses at $0.6–$0.8 billion.

4 points · 0 major

NegativeiHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 15 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.Integrated Gas production expected at 740–780 thousand barrels of oil equivalent daily, versus 631 thousand in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Indicative refining margin increases to $42/barrel, versus $24/barrel in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Financial derivative instrument cash-flow movements forecast at $0–$5 billion, versus negative $0.4 billion in Q2.
• Minor pointARC Resources acquisition completed September 2, 2026; third-quarter Integrated Gas outlook includes the acquisition.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.German emissions-certificate payments expected to cause an approximately $2.5 billion outflow in operating cash flow excluding working capital.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Marketing adjusted earnings expected to be lower than Q2 2026.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Indicative chemicals margin declines to $208/tonne, versus $270/tonne in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Refinery utilisation forecast at 93%–97%, versus 102% in Q2; low Rhine water levels affect Rheinland.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Liquefied natural gas volumes expected at 7.2–7.6 million tonnes, versus 7.7 million tonnes in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Integrated Gas underlying operating expenses expected at $1.3–$1.5 billion, versus $1.1 billion in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Chemicals and Products taxation charge forecast at $1.0–$1.5 billion, versus $0.6 billion in Q2.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Tax paid forecast at $3.1–$3.9 billion, versus $2.9 billion in Q2.

7 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.Corporate adjusted loss forecast at $0.6–$0.8 billion, versus $0.6 billion in Q2.
• Minor point. Forward-looking: it has not happened yet and may not happen.Exploration well write-offs expected at approximately $0.3 billion in Q3 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.Working-capital cash-flow movement forecast at negative $4 billion to positive $1 billion, versus positive $3.4 billion in Q2.
• Minor point. Forward-looking: it has not happened yet and may not happen.Other operating cash-flow movements forecast at negative $4 billion to positive $1 billion, versus positive $0.1 billion in Q2.
• Minor point. Forward-looking: it has not happened yet and may not happen.ARC acquisition cash consideration and assumed debt will affect net debt.
• Minor point. Forward-looking: it has not happened yet and may not happen.Long-term shipping leases have increased variable components that will affect net debt.
• Minor point. Forward-looking: it has not happened yet and may not happen.Chemicals and Products adjusted pre-tax depreciation forecast at $1.1–$1.3 billion, versus $1.1 billion in Q2.

News Explained

The revised production outlook includes ARC and Qatar volumes previously excluded; the completed ARC acquisition is also identified as a net-debt factor.

Shell’s updated Q3 outlook includes ARC Resources after the acquisition closed on September 2, 2026; Shell says net debt will be affected by the acquisition’s cash consideration and assumed debt, as well as increased variable components of long-term shipping leases.

Integrated Gas production guidance is higher than in the previous Q3 outlook; that earlier outlook excluded ARC and Qatar.

Key Figures

Indicative refining margin: $42/bbl Indicative chemicals margin: $208/tonne Exploration well write-offs: ~$0.3 billion +2 more

Indicative refining margin

$42/bbl

Q3’26 updated outlook; Q2’26 was $24/bbl

Indicative chemicals margin

$208/tonne

Q3’26 updated outlook; Q2’26 was $270/tonne

Exploration well write-offs

~$0.3 billion

Expected in Q3’26

Emissions certificate payment outflow

~$2.5 billion

Expected CFFO excluding working capital impact from payment timing

Q3 results publication

29 October, 2026

Scheduled publication date

Key Terms

non-gaap, working capital

2 terms

non-gaap financial

"the definition of the non-GAAP measure used"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

working capital financial

"CFFO excluding working capital is expected to include an ~$2.5 billion outflow"

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

View in glossary

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

The following is an update to the third quarter 2026 outlook and gives an overview of our current expectations for the third quarter. Outlooks presented may vary from the actual third quarter 2026 results and are subject to finalisation of those results, which are scheduled to be published on 29 October, 2026. Unless otherwise indicated, all outlook statements exclude identified items. 

See appendix for the definition of the non-GAAP measure used, the reconciliation from GAAP to non-GAAP and the most comparable GAAP measure.

   Integrated Gas

$ billions	Q2’26	Q3’26 Outlook	Comment
Production (kboe/d)	631	740 - 780
LNG liquefaction volumes (MT)	7.7	7.2 - 7.6
Underlying opex	1.1	1.3 - 1.5
Pre-tax depreciation	1.2	1.1 - 1.5
Taxation charge	0.8	0.6 - 0.9
Other Considerations:
Trading & Optimisation is expected to be in line with Q2’26. Outlook includes the acquisition of ARC resources, which completed on 2 September, 2026.

 Upstream

$ billions	Q2’26	Q3’26 Outlook	Comment
Production (kboe/d)	1,824	1,735 - 1,835
Underlying opex	2.2	2.1 - 2.5
Pre-tax depreciation	2.5	2.2 - 2.8
Taxation charge	2.8	2.5 - 3.3
Other Considerations:
Q3’26 exploration well write-offs are expected to be ~$0.3 billion.

 Marketing

$ billions	Q2’26	Q3’26 Outlook	Comment
Sales volumes (kb/d)	2,570	2,550 - 2,650
Underlying opex	2.5	2.3 - 2.7
Pre-tax depreciation	0.6	0.5 - 0.7
Taxation charge	0.4	0.2 - 0.5
Other Considerations:
Marketing adjusted earnings are expected to be lower than Q2’26.

  Chemicals and Products

$ billions	Q2’26	Q3’26 Outlook	Comment
Indicative refining margin*	$24/bbl	$42/bbl
Indicative chemicals margin*	$270/tonne	$208/tonne
Refinery utilisation	102%	93% - 97%	Low Rhine water levels impacting Rheinland refinery utilisation.
Chemicals utilisation	83%	81% - 85%
Underlying opex	1.9	1.7 - 2.1
Pre-tax depreciation	1.1	1.1 - 1.3
Taxation charge / (credit)	0.6	1.0 - 1.5
Other Considerations:
Trading & Optimisation is expected to be in line with Q2’26.

*See appendix

 Renewables and Energy Solutions

$ billions	Q2’26	Q3’26 Outlook	Comment
Adjusted Earnings	0.1	0.0 - 0.4

  

Corporate

$ billions	Q2’26	Q3’26 Outlook	Comment
Adjusted Earnings	(0.6)	(0.8) - (0.6)

Shell Group

$ billions	Q2’26	Q3’26 Outlook	Comment
CFFO:
Tax paid	2.9	3.1 - 3.9
Financial Derivative Instruments movements	(0.4)	0 - 5
Other	0.1	(4) - 1	CFFO excluding working capital is expected to include an ~$2.5 billion outflow related to timing of payments of emissions certificates relating to the German BEHG*.
Working capital	3.4	(4) - 1
Other Shell Group Considerations:
CFFO excluding working capital includes a $0.8 billion JV dividend inflow, which is offset by a $0.8 billion outflow through working capital (as funds were previously held in deposit by the corporate segment). The net impact on CFFO is zero.
Non-cash post tax impairments of biogas assets in Marketing are expected to be largely offset by an impairment reversal in Integrated Gas. Both are reported as identified items.
Net debt will be impacted by ARC acquisition cash consideration & assumption of debt and an increase in variable components of long-term shipping leases in the current macro environment.

*Brennstoffemissionshandelsgesetz (Fuel Emissions Trading Act), historically paid in the 4th quarter of each calender year

Guidance

The ‘Quarterly Databook’ contains guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities.

Consensus

The company compiled consensus, managed by Vara Research, is expected to be published on October 21, 2026.

Appendix

Indicative Margins

Chemicals & Products	Q2’26	Q3’26 Updated Outlook
Indicative refining margin	$24/bbl	$42/bbl
Indicative chemicals margin	$270/tonne	$208/tonne

Volume Data

Operational Metrics	Q2’26	Q3’26 QPR Outlook	Q3’26 Updated Outlook
Integrated Gas
Production (kboe/d)	631	570 - 630*	740 - 780
LNG liquefaction volumes (MT)	7.7	7.1 - 7.7	7.2 - 7.6
Upstream
Production (kboe/d)	1,824	1,680 - 1,880	1,735 - 1,835
Marketing
Sales volumes (kb/d)	2,570	2,550 - 2,750	2,550 - 2,650
Chemicals & Products
Refinery utilisation	102%	93% - 101%	93% - 97%
Chemicals utilisation	83%	78% - 86%	81% - 85%

*Q3’26 QPR production outlook excluded volumes from ARC Resources and Qatar.

Underlying Opex

Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors. Underlying operating expenses comprises the following items from the Consolidated statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses and removes the effects of identified items such as redundancy and restructuring charges or reversals, provisions or reversals and others. For further details see the 2nd Quarter 2026 and half year unaudited results.

$ billions	Q2’26	Q2’26 Adjusted	Q3’26 Updated Outlook
Production and manufacturing expenses	5.5
Selling, distribution and administrative expenses	2.9
Research and development	0.3
Operating Expenses (Opex)	8.7	8.7
Less: Identified Items		0.2
Underlying Opex		8.4
of which:
Integrated Gas	1.1	1.1	1.3 - 1.5
Upstream	2.2	2.2	2.1 - 2.5
Marketing	2.5	2.5	2.3 - 2.7
Chemicals and Products	2.0	1.9	1.7 - 2.1
Renewables and Energy Solutions	0.6	0.6

Depreciation, depletion and amortisation

$ billions	Q2’26	Q2’26 Adjusted	Q3’26 Updated Outlook
Depreciation, Depletion & Amortisation	6.2	6.2
Less: Identified Items		0.6
Pre-tax depreciation (as Adjusted)		5.6
of which:
Integrated Gas	1.2	1.2	1.1 - 1.5
Upstream	2.5	2.5	2.2 - 2.8
Marketing	0.6	0.6	0.5 - 0.7
Chemicals and Products	1.2	1.1	1.1 - 1.3
Renewables and Energy Solutions	0.7	0.1

Taxation Charge

$ billions	Q2’26	Q2’26 Adjusted	Q3’26 Updated Outlook
Taxation Charge	4.9	4.9
Less: Identified Items and Cost of supplies adjustment		0.4
Taxation Charge (as Adjusted)		4.5
of which:
Integrated Gas	0.8	0.8	0.6 - 0.9
Upstream	2.7	2.8	2.5 - 3.3
Marketing	0.7	0.4	0.2 - 0.5
Chemicals and Products	1.0	0.6	1.0 - 1.5
Renewables and Energy Solutions	(0.1)	—

Adjusted Earnings

The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest. For further details see the 2nd Quarter 2026 and half year unaudited results.

$ billions	Q2’26	Q2’26 Adjusted	Q3’26 Updated Outlook
Income/(loss) attributable to Shell plc shareholders	10.8	10.8
Add: Current cost of supplies adjustment attributable to Shell plc shareholders		(0.6)
Less: Identified items attributable to Shell plc shareholders		0.4
Adjusted Earnings		9.8
of which:
Renewables and Energy Solutions	(0.6)	0.1	0.0 - 0.4
Corporate	(0.6)	(0.6)	(0.8) - (0.6)

Working Capital

Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.

Net Debt

Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances.

Enquiries

Media International: +44 (0) 207 934 5550

Media U.S. and Canada: Contact form

Cautionary Note

The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience to reference Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties.  The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

The numbers presented in this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.

Forward-Looking statements
This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions, including (without limitation) those concerning Shell’s strategy and operating plans, macroeconomic conditions, future energy demand, supply and product mix, commodity prices, demand for Shell’s products, production results and reserve estimates, development, execution and management of projects, energy transition and climate change, management of safety and environmental risks, costs, cash capital expenditures, technology advancements, legislative, judicial, fiscal and regulatory developments, regional conflicts and trading conditions, and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; ‘‘anticipate’’; “aspire”; “aspiration”; ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; “desire”; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; “vision”; ‘‘will’’; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks, including climate change; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including tariffs and regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, regional conflicts, such as the Russia-Ukraine war and the conflict in the Middle East, and a significant cyber security, data privacy or IT incident; (n) the pace of the energy transition; and (o) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2025 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, October 7, 2026. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

Shell’s net carbon intensity and net-zero emissions target
In this announcement we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our combined Scope 1 and 2 target, NCI targets and our oil products ambition over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

The information provided above regarding Shell’s NCI and net zero emissions target are not intended, nor should they be construed as introducing, suggesting or making any claim, target or representation thereof other than what is included in the announcement.

Forward-Looking Non-GAAP measures

This announcement may contain certain forward-looking non-GAAP measures such as Adjusted Earnings, Cash flow from operating activities excluding working capital movements, Net debt and Underlying operating expense.

We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements. These forward-looking non-GAAP measures are provided to assist readers in understanding management’s use and expectations of such measures and may not be appropriate for other purposes. 

The contents of websites referred to in this announcement do not form part of this announcement.

We may have used certain terms, such as resources, in this announcement that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

When will Shell publish its third-quarter 2026 results?

Shell's third-quarter 2026 results are scheduled for October 29, 2026. The outlook remains subject to finalisation and may differ from actual results. Unless otherwise indicated, outlook figures exclude identified items.

What does Shell expect for Integrated Gas production in Q3 2026?

Shell expects Integrated Gas production of 740–780 thousand barrels of oil equivalent per day, compared with 631 thousand in Q2 2026. The outlook includes the ARC Resources acquisition, completed on September 2, 2026.

Did Shell's earlier Q3 2026 Integrated Gas production outlook include ARC Resources and Qatar?

The earlier Q3 production outlook of 570–630 thousand barrels of oil equivalent per day excluded volumes from ARC Resources and Qatar. That exclusion limits direct comparison with the updated production outlook.

How does Shell's joint-venture dividend affect Q3 2026 operating cash flow?

The joint-venture dividend has zero net impact on operating cash flow. A $0.8 billion dividend inflow in operating cash flow excluding working capital is offset by a $0.8 billion working-capital outflow because the funds were previously held in deposit by the Corporate segment.

What asset impairments does Shell expect in Q3 2026?

Shell expects non-cash post-tax impairments of Marketing biogas assets to be largely offset by an impairment reversal in Integrated Gas. Both are classified as identified items.