WRAPUP 1-Shell and Total post highest quarterly profit since 2022

Shell and TotalEnergies reported on Thursday sharply higher third-quarter profits and raised share buybacks, as war-driven energy prices and record refining margins helped both beat expectations. Shell raised its quarterly buyback to $5 billion from $3 billion, the second-largest buyback on record, while Total reiterated ‌plans to buy back $2.5 billion of shares in the fourth quarter and said it would buy back another $2.5 billion in the first quarter of 2027.

The shareholder distributions offer an insight into how oil majors plan to spend the profits generated by the US-Israeli war with Iran, which is in its ninth month and has disrupted global energy supplies. Reflecting its higher payout, shares in Shell gained 3.1% in early ‌trade on Thursday, while Total's rose 0.6%, compared with a broader index of European energy companies rising 1.2%.

REFINING MARGINS ARE A MAJOR SPUR Refining margins nearly quadrupled for both Shell and ‌Total compared with a year ago. They reached $42 a barrel and $33.2 per barrel, respectively, helping to boost earnings to the highest since 2022, when Shell delivered a record $6 billion buyback programme.

Shell posted third-quarter net profit of $10.81 billion, above analysts’ average estimate of $10.33 billion and almost double the $5.43 billion it earned a year earlier. TotalEnergies reported adjusted net income of $9.1 billion for the July to September quarter, more than double the $4.0 billion a year earlier and above an expected $8.3 billion.

Total's refining and chemicals ⁠division posted ​record net income of $3.6 billion, more than five times ⁠the level of a year ago and double the previous quarter. CEO Patrick Pouyanné said a nearly 10% increase in refining throughput, along with strong oil trading, had captured historically high refining margins in Europe and worldwide. Total's income in its ⁠LNG unit rose to $1.9 billion on average gas prices that were up 20% compared to the last quarter and strong LNG and gas trading.

SHELL'S SHAREHOLDER RETURNS STAND OUT Since December 30, 2022, Shell has delivered a 120% ​total shareholder return, including reinvested dividends, ahead of BP’s 78%, TotalEnergies’ 84%, ExxonMobil’s 89% and Chevron’s 51%, according to Shell data.

Shell beat expectations across all its segments. Its cash flow from ⁠operations, excluding working capital, rose to $21.7 billion from $12.24 billion a year earlier and beat expectations of $18.18 billion. RBC analyst Biraj Borkhataria said even with a roughly $5 billion buyback next quarter, Shell will likely miss its 40% to 50% payout ratio guidance for ⁠the ​year, a shortfall he attributed to abnormal macro conditions.

Shell’s oil and gas output fell 17% in the first nine months of 2026 from a year earlier, mainly because war in the Middle East reduced volumes from Qatar. LNG liquefaction volumes rose 12%, driven by the ramp-up at LNG Canada and partly offset by the Qatari disruption. 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 its two trains. It has has restarted the plant but at reduced output and says repairs could ⁠take about a year.

Shell recorded $5.4 billion in non-cash ⁠increases to shipping leases, which count toward net debt. Shell booked an impairment of around $2 billion across its European biogas business, which includes assets from its 2023 $2 billion acquisition of Denmark-based Nature Energy, due to lowered expectations of growth in the market. Shell lowered its capital expenditure guidance for 2026 ‌to $23 billion to $25 billion from $24 billion ‌to $26 billion.