Summary 2 - Shell and Total announce their highest quarterly profits since 2022

Updated the impact of inflation (paragraph 3), updated stock prices (paragraph 4), added OMV’s performance (paragraph 5), detailed TotalEnergies’ debt ratio (paragraphs 11-12)

Shadia Nasralla/Stephanie Kelly/Dimitri Rhodes

Reuters London, October 29 - Shell SHEL.L and TotalEnergies TTEF.PA reported sharply higher third-quarter profits on Thursday and increased their share buyback programs. Driven by war-boosted energy prices and record-high refining margins, both companies outperformed expectations.

Shell raised its quarterly buyback from $3 billion to $5 billion, marking its second-highest buyback on record; TotalEnergies reaffirmed (link) its plan to buy back $2.5 billion of shares in Q4 and said (link) it will repurchase another $2.5 billion in the first quarter of 2027.

These shareholder payout plans reveal how the oil giants intend to dispose of (link) profits generated by the war between Israel and Iran (link)—a conflict that has disrupted global energy supplies for nine months. The surge in energy prices (link) has increased global consumer inflationary pressures and raised input costs for industries.

Boosted by increased dividends, Shell’s shares jumped 3.2%, TotalEnergies’ shares rose 1.8%, and the European energy company composite index .SXEP was up 1.9% in early Thursday trading.

BP BP.L, Chevron CVX.N, and ExxonMobil XOM.N will report earnings on Friday. Also on Thursday, Austria’s OMV OMVV.VI reported its quarterly operating profit (link) reached a new high since 2022.

Refining margins are the main driver

Compared to a year ago, Shell’s and TotalEnergies’ refining margins grew nearly fourfold. Their respective refining margins reached $42 and $33.2 per barrel, lifting their profits to the highest level since 2022—when Shell carried out a record $6 billion buyback.

Shell posted a third-quarter net profit of $10.81 billion, above the $10.33 billion average analyst estimate and almost double the $5.43 billion earned a year earlier.

TotalEnergies reported adjusted net income of $9.1 billion for the July-September quarter, more than double last year’s $4 billion and above the expected $8.3 billion.

TotalEnergies’ refining and chemicals division delivered a record net profit of $3.6 billion—more than five times higher than the year before and twice the previous quarter. CEO Patrick Pouyanné said refining throughput grew nearly 10%, and strong crude trading enabled the company to achieve the highest refining margins ever across Europe and globally.

Benefiting from a 20% quarter-on-quarter rise in average natural gas prices and strong performances from LNG and gas trading, TotalEnergies’ LNG business division’s profit reached $1.9 billion.

As of the end of September, the company’s debt ratio fell from 13.1% at the end of the previous quarter to 9.1%, below its target of bringing it under 10% by the end of 2026.

Jefferies rated TotalEnergies’ results as “solid but not outstanding,” noting hydrocarbon output of 2.5 million barrels of oil equivalent per day—4% below consensus. TotalEnergies also booked a $1.9 billion impairment, mainly linked to offshore wind projects and its stake in a South Korean petrochemical company.

Shell stands out on shareholder returns

According to Shell, its total shareholder return (including reinvested dividends) since December 30, 2022, reached 120%, ahead of BP’s 78%, TotalEnergies’ TTEF.PA 84%, ExxonMobil’s 89%, and Chevron’s 51%.

https://www.reuters.com/graphics/TOTALENERGIES-RESULTS/zgvoddkqkpd/chart.png

All of Shell’s business segments outperformed expectations.

Its cash flow from operations (excluding working capital) jumped from $12.24 billion a year ago to $21.7 billion, beating the $18.18 billion forecast. RBC analyst Biraj Borkhataria said Shell may still fall short of its 40-50% payout rate guidance this year, even with around $5 billion of share buybacks in the next quarter, citing the abnormal macroeconomic environment as the reason for the gap.

https://www.reuters.com/graphics/SHELL-RESULTS/dwvkqgjyovm/chart.png

In the first nine months of 2026, Shell’s oil and gas production was down 17% year-on-year, mainly due to reduced output from Qatar caused by the Middle East conflict. LNG liquefaction increased by 12% thanks to capacity ramp-up at the LNG Canada project, but this growth was partially offset by supply interruptions in Qatar.

In March, Ras Laffan Industrial City was attacked, damaging one of Pearl GTL’s two production lines in Qatar. Shell subsequently suspended production at the plant (link). The plant has now resumed operations (link), although at reduced capacity, and Shell says repairs may take about a year.

Shell recorded a $5.4 billion non-cash vessel lease mark-up, which is included in net debt. The company took a $2 billion impairment on its European biomethane business, including assets of Denmark’s Nature Energy, acquired in 2023 for $2 billion, due to reduced growth expectations.

Shell cut its 2026 capital expenditure guidance from the $24-26 billion range to $23-25 billion.

(For the convenience of non-English speakers, Reuters provides automatic translations of its reports into several other languages. Because automated translations may contain errors or lack necessary context, Reuters does not guarantee the accuracy of automated translation texts, and they are intended solely to assist readers. Reuters accepts no liability for any harm or loss arising from the use of automated translation functions.)