Shell to lift buyback to $5 billion as profit soars

what happened

Shell nearly doubled its third-quarter adjusted earnings to $10.81 billion, up from $5.43 billion a year earlier, Dow Jones Newswires reported. Analysts had expected $10.33 billion, according to estimates compiled by Vara Research. The company is raising its quarterly share repurchases to $5 billion, after cutting them to $3 billion from $3.5 billion earlier in the year.

The gains came from elevated oil and gas prices tied to the Middle East conflict and record refining margins, which reached $42 a barrel. Oil remains above $100 a barrel, even though workarounds such as pipelines and ship-to-ship transfers have restored Hormuz flows to pre-conflict levels. Wood Mackenzie estimates that roughly 6 million barrels a day of refining capacity is offline, due to drone damage to Russian refineries and reduced activity across the Middle East.

The integrated gas unit also benefited from strong European gas prices, with its earnings rising to $3.04 billion. However, the Pearl gas-to-liquids plant in Qatar was targeted. Shell has partially restarted one section, and expects the damaged facility to resume production at the end of the first quarter next year.

why it matters

Two points matter for markets: the geopolitical premium still embedded in oil and gas prices, and the resilience of refining margins that support energy companies' cash flows. Buybacks typically support share prices, but the outlook will depend on commodity prices and how quickly margins ease in the fourth quarter.

market impact

Shell shares: higher profit and a $5 billion buyback support the stock

• ▲Shell shares pressure up — the expanded $5 billion buyback supports demand for the stock

tags

instruments