Shell second quarter 2026 update note
Rhea-AI Summary
Shell (NYSE:SHEL) issued an updated outlook for Q2 2026 ahead of results on July 30, 2026. Guidance covers production, margins, costs, taxation and cash flow across all segments.
Key items include lower Integrated Gas production, higher refining and chemicals indicative margins, Q2 working capital inflow and a wide Renewables and Energy Solutions earnings range.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Positive
- Integrated Gas Trading & Optimisation expected to be significantly higher than Q1 2026
- LNG liquefaction volumes outlook raised to 7.4–7.8 MT from 6.8–7.4 MT
- Indicative refining margin guided around $20/bbl versus $17/bbl in Q1 2026
- Indicative chemicals margin guided around $240/tonne versus $139/tonne in Q1 2026
- Refinery utilisation guided around 100% versus 99% in Q1 2026
- Shell Group working capital movement guided to +$1–6 billion versus –$11.2 billion in Q1 2026
Negative
- Integrated Gas production guided to 610–650 kboe/d versus 909 kboe/d in Q1 2026
- Middle East conflict expected to impact Qatari Integrated Gas volumes
- Renewables and Energy Solutions adjusted earnings outlook ranges from –$0.3 to $0.3 billion
- Upstream taxation charge expected to rise to $2.4–3.2 billion versus $2.1 billion in Q1 2026
- Tax paid in CFFO guided higher at $2.6–3.4 billion versus $2.3 billion in Q1 2026
- Realised refining and chemicals margins are lower than calculated indicative margins due to market dislocations
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jun 30 | Voting rights update | Neutral | +0.8% | Reported total voting rights and share count as of June 30, 2026. |
| Jun 15 | Dividend payment details | Positive | -3.6% | Confirmed currency equivalents and payment date for Q1 2026 interim dividend. |
| Jun 12 | Buyback pause notice | Neutral | -0.2% | Announced temporary pause of $3.0B share buyback due to legal requirements. |
| Jun 12 | Share repurchase report | Neutral | -0.2% | Disclosed repurchase of 1,986,023 shares for cancellation under buyback programme. |
| Jun 11 | Share repurchase report | Neutral | -0.2% | Reported 1,901,813 shares bought back across multiple venues for cancellation. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent company announcements have generally produced modest share-price reactions without a clear directional pattern.
Regulatory & Risk Context
Short interest appears relatively low, suggesting limited short-squeeze potential and only a modest contribution to share price volatility from short covering.
Key Terms
non-gaap financial
underlying opex financial
working capital financial
net debt financial
depreciation, depletion & amortisation financial
adjusted earnings financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
The following is an update to the second quarter 2026 outlook and gives an overview of our current expectations for the second quarter. Outlooks presented may vary from the actual second quarter 2026 results and are subject to finalisation of those results, which are scheduled to be published on July 30, 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 | Q1’26 | Q2’26 Outlook | Comment |
| Production (kboe/d) | 909 | 610 - 650 | Reflects the impact of the Middle East conflict on Qatari volumes. |
| LNG liquefaction volumes (MT) | 7.9 | 7.4 - 7.8 | |
| Underlying opex | 1.2 | 1.0 - 1.2 | |
| Pre-tax depreciation | 1.5 | 1.1 - 1.5 | |
| Taxation charge | 0.7 | 0.5 - 0.8 | |
| Other Considerations: | |||
| Trading & Optimisation is expected to be significantly higher than Q1’26. | |||
Upstream
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| Production (kboe/d) | 1,843 | 1,750 - 1,850 | |
| Underlying opex | 2.2 | 2.2 - 2.6 | |
| Pre-tax depreciation | 2.6 | 2.2 - 2.8 | |
| Taxation charge | 2.1 | 2.4 - 3.2 | |
| Other Considerations: | |||
| - | |||
Marketing
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| Sales volumes (kb/d) | 2,627 | 2,550 - 2,650 | |
| Underlying opex | 2.4 | 2.3 - 2.7 | |
| Pre-tax depreciation | 0.6 | 0.5 - 0.7 | |
| Taxation charge | 0.5 | 0.4 - 0.7 | |
| Other Considerations: | |||
| Marketing adjusted earnings are expected to be in line with Q1’26. | |||
Chemicals and Products
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| Indicative refining margin | ~ | ||
| Indicative chemicals margin | ~ | ||
| Refinery utilisation | ~ | ||
| Chemicals utilisation | |||
| Underlying opex | 2.0 | 1.8 - 2.2 | |
| Pre-tax depreciation | 0.9 | 1.1 - 1.3 | |
| Taxation charge / (credit) | 0.7 | 0.3 - 0.8 | |
| Other Considerations: | |||
| Trading & Optimisation is expected to be in line with Q1’26. | |||
*Given market dislocations, realised refining and chemicals margins are lower than the calculated IRM / ICM and have been adjusted accordingly.
Renewables and Energy Solutions
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| Adjusted Earnings | 0.3 | (0.3) - 0.3 |
Corporate
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| Adjusted Earnings | (0.9) | (0.7) - (0.5) |
Shell Group
| $ billions | Q1’26 | Q2’26 Outlook | Comment |
| CFFO: | |||
| Tax paid | 2.3 | 2.6 - 3.4 | |
| Financial Derivative Instruments movements | (0.4) | (1) - 4 | |
| Working capital | (11.2) | 1 - 6 | Reflects impact of unprecedented volatility in commodity prices. |
| Other Shell Group Considerations: | |||
| - | |||
Guidance
The ‘Quarterly Databook’ contains guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities.
In light of the ongoing situation in the Middle East, full-year price and margin sensitivities do not necessarily reflect realised margin movements in an individual quarter.
Consensus
The company compiled consensus, managed by Vara Research, is expected to be published on July 22, 2026.
Appendix
Indicative Margins
| Chemicals & Products | Q1’26 | Q2’26 Updated Outlook |
| Indicative refining margin | ~ | |
| Indicative chemicals margin | ~ |
*Given market dislocations, realised refining and chemicals margins are lower than the calculated IRM / ICM and have been adjusted accordingly.
Volume Data
| Operational Metrics | Q1’26 | Q2’26 QPR Outlook | Q2’26 Updated Outlook |
| Integrated Gas | |||
| Production (kboe/d) | 909 | 580 - 640 | 610 - 650 |
| LNG liquefaction volumes (MT) | 7.9 | 6.8 - 7.4 | 7.4 - 7.8 |
| Upstream | |||
| Production (kboe/d) | 1,843 | 1,620 - 1,820 | 1,750 - 1,850 |
| Marketing | |||
| Sales volumes (kb/d) | 2,627 | 2,500 - 2,700 | 2,550 - 2,650 |
| Chemicals & Products | |||
| Refinery utilisation | ~ | ||
| Chemicals utilisation |
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 1st Quarter 2026 unaudited results.
| $ billions | Q1’26 | Q1’26 Adjusted | Q2’26 Updated Outlook |
| Production and manufacturing expenses | 5.7 | ||
| Selling, distribution and administrative expenses | 2.8 | ||
| Research and development | 0.2 | ||
| Operating Expenses (Opex) | 8.7 | 8.7 | |
| Less: Identified Items | 0.1 | ||
| Underlying Opex | 8.6 | ||
| of which: | |||
| Integrated Gas | 1.2 | 1.2 | 1.0 - 1.2 |
| Upstream | 2.3 | 2.2 | 2.2 - 2.6 |
| Marketing | 2.5 | 2.4 | 2.3 - 2.7 |
| Chemicals and Products | 2.0 | 2.0 | 1.8 - 2.2 |
| Renewables and Energy Solutions | 0.6 | 0.6 |
Depreciation, depletion and amortisation
| $ billions | Q1’26 | Q1’26 Adjusted | Q2’26 Updated Outlook |
| Depreciation, Depletion & Amortisation | 5.7 | 5.7 | |
| Less: Identified Items | — | ||
| Pre-tax depreciation (as Adjusted) | 5.7 | ||
| of which: | |||
| Integrated Gas | 1.5 | 1.5 | 1.1 - 1.5 |
| Upstream | 2.6 | 2.6 | 2.2 - 2.8 |
| Marketing | 0.5 | 0.6 | 0.5 - 0.7 |
| Chemicals and Products | 1.0 | 0.9 | 1.1 - 1.3 |
| Renewables and Energy Solutions | 0.1 | 0.1 |
Taxation Charge
| $ billions | Q1’26 | Q1’26 Adjusted | Q2’26 Updated Outlook |
| Taxation Charge | 3.6 | 3.6 | |
| Less: Identified Items and Cost of supplies adjustment | (0.4) | ||
| Taxation Charge (as Adjusted) | 4.0 | ||
| of which: | |||
| Integrated Gas | 0.6 | 0.7 | 0.5 - 0.8 |
| Upstream | 1.8 | 2.1 | 2.4 - 3.2 |
| Marketing | 0.8 | 0.5 | 0.4 - 0.7 |
| Chemicals and Products | 0.3 | 0.7 | 0.3 - 0.8 |
| Renewables and Energy Solutions | 0.2 | 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 1st Quarter 2026 unaudited results.
| $ billions | Q1’26 | Q1’26 Adjusted | Q2’26 Updated Outlook |
| Income/(loss) attributable to Shell plc shareholders | 5.7 | 5.7 | |
| Add: Current cost of supplies adjustment attributable to Shell plc shareholders | (1.2) | ||
| Less: Identified items attributable to Shell plc shareholders | (2.4) | ||
| Adjusted Earnings | 6.9 | ||
| of which: | |||
| Renewables and Energy Solutions | 0.5 | 0.3 | (0.3) - 0.3 |
| Corporate | (0.9) | (0.9) | (0.7) - (0.5) |
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.
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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 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, July 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
Also, 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 net-zero emissions target
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.
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.
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.
