London, 29 October 2026 — EBM Newsdesk Analysis — By Anthony Gill
The war in the Middle East is squeezing households across Europe, but it is delivering a windfall for its oil companies. Shell and TotalEnergies have reported their biggest quarterly profits since 2022 and are returning billions of dollars to shareholders.
Shell made a net profit of $10.8bn in the third quarter, nearly double the $5.4bn of a year earlier and ahead of analysts’ forecasts of $10.3bn, according to Reuters. It raised its quarterly share buyback from $3bn to $5bn, one of the largest in its history. TotalEnergies more than doubled its adjusted net income to $9.1bn and confirmed $2.5bn of buybacks for this quarter, with another $2.5bn planned for early 2027.
Refining Is the Real Winner
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SubscribeThe biggest gains came from refining, the business of turning crude oil into diesel, petrol and jet fuel. Shell’s refining margin nearly quadrupled to $42 a barrel, while TotalEnergies’ rose to $33.2. TotalEnergies’ refining and chemicals arm posted record net income of $3.6bn, more than five times the level of a year earlier.
The reason is the war. Fighting involving Iran, now in its ninth month, has disrupted supplies through the Gulf and pushed Brent crude above $110. Fuel markets have been squeezed hardest, as Ukrainian drone strikes forced Russia to ban diesel exports and refineries elsewhere struggled to keep up.
Norway’s Equinor also benefited. Its adjusted operating income rose to $12.4bn, and it raised its 2026 production growth forecast to about 4%, it said. “High production in the third quarter enabled us to capture additional value from higher prices,” chief executive Anders Opedal said.
Not Without Cost
The war has hurt the companies too. Shell’s Pearl gas-to-liquids plant in Qatar was halted in March after an attack on Ras Laffan and is running at reduced output, with repairs expected to take about a year. Shell’s oil and gas production fell 17% in the first nine months of the year, and it took a roughly $2bn write-down on its European biogas business.
But investors are delighted. Shell’s total shareholder return since the end of 2022 is 120%, ahead of ExxonMobil and well ahead of BP.
The Political Backlash Is Coming
Bumper profits at a time of soaring energy bills will be politically explosive. As EBM has reported, the energy shock has pushed UK inflation up to 3.5%, and governments are under pressure to help households with energy costs. When prices spiked after Russia’s invasion of Ukraine in 2022, Britain and the EU responded with windfall taxes on energy companies. Expect the same calls now.
The profits also reopen the debate over the energy transition. European majors have scaled back green investment in favour of oil and gas, part of a wider shift as the EU’s competitiveness drive turns the green transition on its head. The war has made that strategy look highly profitable, at least for now.
The Call
Europe’s oil majors are making a fortune from a war that is hurting almost everyone else. That is good news for shareholders and pension funds, which own much of these companies, but it is a political problem waiting to happen. With households paying more for energy and fuel, governments will find it hard to resist new windfall taxes, especially in Britain, where budgets are tight. The buybacks will also fuel the argument that oil companies are rewarding investors rather than cutting prices or investing in supply. For now the profits will keep flowing as long as the war lasts. When it ends, refining margins will fall as fast as they rose.
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