Shell and TotalEnergies Post Highest Quarterly Profit Since 2022

Companies beat expectations on war-driven energy prices and record refining margins, and increase share buybacks

Britain’s Shell (SHEL.L) and France’s TotalEnergies (TTEF.PA) reported a sharp rise in third-quarter profit on Thursday. The results exceeded analysts’ forecasts, and both companies also raised shareholder payouts.

Buybacks Expand

Shell raised its quarterly share buyback from $3 billion to $5 billion, the second-largest in its history. TotalEnergies reiterated plans to buy back $2.5 billion of shares in the fourth quarter and said it would allocate another $2.5 billion in the first quarter of 2027.

The shareholder payouts offer a glimpse of how the oil majors plan to spend the profits from the US-Israeli war with Iran, which is entering its ninth month and has disrupted global energy supplies.

In early trading on Thursday, Shell shares rose 3.1% and TotalEnergies shares rose 0.6%, while the broader European energy index (.SXEP) gained 1.2%.

Refining Margins Were the Key Factor

Both companies’ refining margins rose roughly fourfold from a year earlier, reaching $42 per barrel for Shell and $33.2 for TotalEnergies. This helped push profit to its highest level since 2022, when Shell carried out a record $6 billion buyback programme.

Shell posted third-quarter net profit of $10.81 billion. That is above the analysts’ average forecast of $10.33 billion and nearly double the $5.43 billion a year earlier.

TotalEnergies’ adjusted net profit for July-September was $9.1 billion, compared with $4.0 billion a year earlier and analysts’ expectations of $8.3 billion.

TotalEnergies’ refining and chemicals division posted record results, earning $3.6 billion. That is more than five times the figure a year earlier and double the previous quarter. CEO Patrick Pouyanné said refinery throughput rose by about 10% and strong oil trading enabled historically high refining margins in Europe and worldwide.

The company’s LNG division income rose 20% from the previous quarter to $1.9 billion, driven by strong LNG and gas trading.

Shell Beat Expectations Across All Segments

Shell’s cash flow from operations excluding working capital rose from $12.24 billion a year earlier to $21.7 billion, against a forecast of $18.18 billion. The company’s profit benefited from high oil and gas prices, supported by its huge trading desks exploiting price volatility created by the war.

RBC analyst Biraj Borkhataria said that even with a roughly $5 billion buyback next quarter, Shell will most likely exceed its 40-50% payout ratio target for the year. The company attributes this to unusual macroeconomic conditions.

According to Shell, its total shareholder return, including reinvested dividends, has been 120% since December 30, 2022. By comparison, BP’s is 78%, TotalEnergies’ 84%, ExxonMobil’s 89% and Chevron’s 51%.

Qatar Output Down

Shell’s oil and gas production fell 17% in the first nine months of 2026 compared with a year earlier. The main reason is that the Middle East war has reduced volumes from Qatar. Liquefied natural gas (LNG) output rose 12%, thanks to growth in Canada, partly offset by disruptions in Qatar.

Shell halted production at its Pearl gas-to-liquids plant in Qatar in March after an attack on Ras Laffan Industrial City damaged one of two trains. The company has restarted the plant, but output remains reduced. Shell said repairs could take about a year.

Other Points

Shell recorded a $5.4 billion non-cash increase in shipping leases, which is included in net debt. The company also booked an impairment of about $2 billion in its European biogas business, which includes the assets of Denmark’s Nature Energy, acquired in 2023 for $2 billion. The impairment was due to lower market growth expectations.

In addition, Shell lowered its 2026 capital spending forecast from $24-26 billion to $23-25 billion.