Shell reported income attributable to shareholders of $10.8 billion for the second quarter of 2026, supported by higher realized energy prices, strong trading and optimization activity, record upstream production in Brazil and record refinery utilization. Adjusted earnings reached $9.84 billion, up from $6.92 billion in the first quarter, while adjusted EBITDA increased to $20.71 billion from $17.74 billion.
Cash flow from operations rose sharply to $21.43 billion from $6.06 billion in the previous quarter. The result included a $3.4 billion working capital inflow, compared with an $11.2 billion working capital outflow during the first quarter. Free cash flow reached $17.5 billion, up from $2.9 billion, while divestment proceeds totaled approximately $500 million.
Shell announced another $3 billion of new share repurchases, marking the 19th consecutive quarter in which it has announced buybacks of at least that amount. The second-quarter program also includes approximately $1.2 billion of repurchases that were not completed under the previous program after Shell suspended it in connection with the proposed acquisition of ARC Resources.
The company distributed approximately 44% of cash flow from operations to shareholders over the past 12 months, remaining within its policy of returning 40% to 50% of cash flow through the cycle. Shareholder distributions include dividends and repurchases, although the amount available in future periods will continue to depend on commodity prices, operating performance and capital requirements.
Shell ended the quarter with net debt of approximately $41.8 billion, down from $52.6 billion at the end of the first quarter and $43.2 billion a year earlier. Gearing stood at 19%, while net debt excluding lease liabilities was approximately $12 billion. The company left its 2026 capital expenditure outlook unchanged at between $24 billion and $26 billion.
The company has achieved approximately $5.8 billion of structural cost reductions since 2022, including around $700 million delivered during the first half of 2026. These reductions are intended to lower recurring operating expenses rather than rely on temporary benefits from commodity prices or working capital movements.
Integrated Gas generated adjusted earnings of $2.69 billion and adjusted EBITDA of $4.76 billion. Earnings increased substantially from approximately $1.8 billion in the first quarter as stronger trading and optimization results and higher realized prices offset lower production and sales volumes.
The segment’s realized liquids price increased to $80 per barrel from $77, while its realized gas price rose to $7.20 per thousand cubic feet from $6.50. Production declined to 631,000 barrels of oil equivalent per day from 909,000, and LNG sales volumes fell to 18 million tonnes from 19.2 million tonnes. Shell expects third-quarter Integrated Gas production of between 570,000 and 630,000 barrels of oil equivalent per day and LNG liquefaction volumes of 7.1 million to 7.7 million tonnes. The outlook excludes contributions from ARC Resources and Qatar.
Upstream adjusted earnings increased to $3.49 billion from approximately $2.4 billion, primarily reflecting higher realized oil and gas prices. Adjusted EBITDA reached $8.89 billion, making Upstream Shell’s largest segment by that measure during the quarter.
Upstream realized liquids prices rose to $89 per barrel from $72, while realized gas prices increased to $8.30 per thousand cubic feet from $6.90. Liquids production increased to 1.37 million barrels of oil equivalent per day, although lower gas output reduced total production slightly to 1.82 million barrels of oil equivalent per day. Shell expects third-quarter production of between 1.68 million and 1.88 million barrels of oil equivalent per day, reflecting higher planned maintenance across the portfolio.
Marketing delivered adjusted earnings of $1.33 billion and adjusted EBITDA of $2.39 billion, broadly in line with the first quarter. Lower sales volumes and weaker lubricant margins were offset by favorable tax movements. Total Marketing sales declined to 2.57 million barrels per day from 2.63 million, including lower Mobility and Lubricants volumes.
Chemicals & Products recorded adjusted earnings of $2.88 billion, up from approximately $1.9 billion in the first quarter, and adjusted EBITDA of $4.66 billion. Products, which includes refining and trading, contributed approximately $2.5 billion of adjusted earnings, while Chemicals contributed approximately $400 million.
Refinery processing intake increased to 1.27 million barrels per day, and refinery utilization reached 102%, compared with 99% during the first quarter. The global indicative refining margin increased to $24 per barrel from $17, while the global indicative chemical margin nearly doubled to $270 per tonne from $139. Shell noted that realized margins were below the calculated industry indicators because of market dislocations, but higher margins still produced the Chemicals business’s strongest adjusted earnings since the third quarter of 2021.
Renewables & Energy Solutions generated adjusted earnings of $79 million and adjusted EBITDA of $212 million, although its reported loss was approximately $600 million. Adjusted earnings declined from the first quarter because of weaker trading and optimization performance. External power sales decreased to 70 terawatt-hours from 72, while pipeline gas sales to end customers fell to 161 terawatt-hours from 197.
Shell continued reshaping its portfolio through the completed sale of Jiffy Lube in the United States and announced divestments involving SPRNG Energy in India, its South African Marketing business and the Na Kika end-of-life assets in the Gulf of America. The proposed ARC Resources acquisition has received shareholder approval and is expected to close during the third quarter of 2026. Shell expects the transaction to increase its production growth outlook to a compound annual rate of approximately 4% through 2030, measured from 2025.
KEY QUOTE:
“Shell’s operational performance enabled very strong results during another quarter of severe disruption in global energy markets, as we worked hard to provide critical energy supplies and products to our customers.”
“Consistent with our strategy, we remain disciplined in our capital allocation, divesting non-core assets and investing in higher-quality growth opportunities, including the announced ARC acquisition.”
“Today, we commence another $3 billion of share buybacks, in line with our 40-50% of CFFO through the cycle distribution policy.”
Wael Sawan, Chief Executive Officer of Shell
