Shell Posts $9.8 Billion Second Quarter as Iran War Drives Oil Prices and Trading
Adjusted earnings more than doubled year-on-year as elevated crude prices from the Iran conflict drove Shell's best quarterly result in four years.
Shell reported adjusted earnings of $9.8 billion for the second quarter on Thursday (2026-07-30), more than double the $4.26 billion from the same three months in 2025 and above analyst estimates of $8.8 billion to $8.9 billion, the company said.6,5
Half-year underlying earnings reached $16.75 billion, a 70% jump on the prior year's first half, making the April-to-June period Shell's best quarterly result in four years. The company attributed the surge to elevated oil prices and severe disruption in global energy markets caused by the Iran war, even as CEO Wael Sawan framed it as an operational achievement rather than a windfall.7,5
The crude price environment was exceptional. ICE Brent crude front-month briefly broke above $100 a barrel during the week of July 13 (2026-07-13), driven by Hormuz supply fears after peace talks broke down, before easing following a US-Iran ceasefire pause announced around July 26 (2026-07-26). The front-month traded at $90.15 a barrel as of July 29 (2026-07-29). The Q2 average for Brent came in at $96.68 a barrel, a 23% rise from the first quarter.8,4,2
Shell's gain went well beyond commodity price exposure. Refinery utilization hit 102% in the April-to-June period, up from 99% in the first quarter of 2026, driven by lower planned and unplanned maintenance. Record upstream production in Brazil added to output volumes. Cash flow from operations reached $21.4 billion, with a $3.4 billion working capital inflow, and free cash flow jumped to $17.5 billion from $6.5 billion in the equivalent quarter of 2025.6,5
"Volatility is the new normal," Sawan told CNBC on Thursday (2026-07-30). Shell has spent the past four years building a structure that can absorb that volatility on favorable terms. The company has cut structural costs by $5.8 billion since 2022, with around $700 million delivered in the first half of 2026 alone.5,8
Shell announced another $3 billion buyback to be completed in the third quarter — its 19th consecutive quarter with at least that level of shareholder returns. The previous buyback round was briefly postponed due to securities laws while Shell pursued a $16.4 billion acquisition of Canada's ARC Resources.6,5
The gap between European majors and their US counterparts has widened. Analysis published in the Economist in May (2026-05-17) noted that Exxon and Chevron had benefited less from the Iran war than their European rivals; Shell's Q2 result now puts numbers to that divergence, though the underlying dynamic the Economist identified appears to have held. Exxon projected a roughly $5 billion second-quarter earnings increase when it issued guidance on Wednesday (2026-07-08), driven by the same elevated crude and refining environment; Shell's result at $9.8 billion came in comfortably above that scale of improvement.1,2
Crude prices have already retreated from their peak. ICE Brent crude front-month stood at $90.15 a barrel on July 29 (2026-07-29), roughly $10 below the intraday highs of mid-July. Goldman Sachs analysts, writing on July 21 (2026-07-21), estimated that Brent could top $120 a barrel in the third quarter if flows through the Strait of Hormuz remain disrupted, but outlined the inverse path just as clearly: a sustained easing of tensions would compress the price environment that Shell's record refinery utilization economics depend on.3,4
Shell's trading book tends to benefit from volatility itself rather than from a sustained directional move in either direction. A durable ceasefire that flattens price swings rather than simply moving crude $10 lower could weigh on the segment that arguably contributed most to this quarter's outperformance. Whether the US-Iran pause announced on July 26 (2026-07-26) holds or whether Hormuz flows tighten again is the variable most directly shaping Shell's Q3 result.4,8