LONDON 30th July 2026 -EBM NEWSDESK ANALYSIS – Anthony Gill
Shell has reported the second-highest quarterly profit in its history after its traders capitalised on the energy-market disruption created by the conflict with Iran.
The London-listed energy major posted adjusted earnings of $9.84bn for the three months to June, more than double the $4.26bn recorded a year earlier and comfortably ahead of analysts’ expectations of approximately $8.9bn.
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SubscribeOnly the second quarter of 2022, when Russia’s invasion of Ukraine sent oil and gas prices soaring, has produced a larger profit for the company.
Trading through the disruption
Shell’s performance demonstrates why the largest energy groups are not merely producers of oil and gas. They are also sophisticated commodity-trading businesses capable of making money from the dislocation between where energy is produced, where it is needed and what buyers are prepared to pay for secure delivery.
The conflict involving Iran disrupted established trade routes, drove up crude and European gas prices and created significant differences between regional markets. Shell’s traders were able to redirect cargoes, optimise its global portfolio and capture the higher margins created by that instability.
The company said LNG trading and optimisation generated significantly more value than during the previous quarter. Shell’s integrated gas division earned about $2.7bn despite production being hit by disruption at its Pearl gas-to-liquids facility in Qatar.
That resilience matters. The same conflict that damaged part of Shell’s regional production base simultaneously created the pricing volatility from which its wider trading operation profited.
It is a dynamic EBM examined in The Business of War: Who Is Profiting From the Iran Conflict, where higher energy prices were already transferring billions of dollars from consumers and importing economies towards producers, traders and exporters.
Refineries return to the centre
Shell’s downstream operations also delivered a powerful contribution.
Its refineries operated at approximately 102 per cent of stated capacity during the quarter as disrupted fuel markets strengthened margins. The chemicals and products division generated around $2.9bn, while jet-fuel production increased by approximately 20 per cent from a year earlier.
This is another consequence of the Iran disruption that headline oil prices do not fully capture. Restrictions around the Strait of Hormuz and the Red Sea affect not only the supply of crude but also the movement of diesel, aviation fuel and other refined products.
EBM’s analysis of oil trading above $90 as Iran targeted tankers in the Strait of Hormuz showed how rapidly even a limited interruption at the world’s most important energy chokepoint can be incorporated into prices.
Shell’s results show where part of that risk premium ultimately ends up.
Shareholders receive another $3bn
The strong quarter generated more than $21bn of operating cash flow and allowed Shell to reduce net debt to approximately $42bn.
The company announced a further $3bn share-buyback programme, maintaining the level set during the previous quarter. It also plans to complete delayed repurchases connected with its acquisition of Canadian natural-gas producer ARC Resources.
Chief executive Wael Sawan described the results as evidence that Shell could “deliver through volatility”. That is accurate, although the source of the volatility should not be forgotten.
For shareholders, geopolitical disruption has produced higher profits, stronger cash generation and billions of dollars in repurchases. For airlines, manufacturers and European consumers, the same disruption means more expensive fuel, freight and electricity.
Shell did not create the crisis, and its traders are doing precisely what shareholders expect them to do. But the figures illustrate the uncomfortable distributional reality of an energy shock: one company’s operational excellence can be another economy’s inflation problem.
BP experienced the same pattern earlier this year when Iran-related trading gains helped it double quarterly profit.
The longer instability around Iran and the Gulf continues, the greater the opportunity for globally integrated traders such as Shell. Peace may be good for the wider economy. Volatility, once again, has proved exceptionally good for the oil majors.
