Shell (SHEL:NYSE) more than doubled its second-quarter earnings year-over-year, as higher oil and gas prices, record refinery utilization, and strong trading performance lifted profits well above analyst expectations.

On Thursday, Shell reported adjusted earnings of $9.84 billion for the second quarter of 2026, more than double the $4.26 billion posted for the same period a year earlier. The result significantly exceeded analyst estimates, which had ranged between $8.8 billion and $8.9 billion.

According to the company, the earnings increase was driven by a jump in realized oil and gas prices, higher profits from crude, fuel, and LNG trading, surging chemicals margins, and record refinery utilization. Refinery utilization reached 102% during the April-to-June period, up from 99% in the first quarter of 2026, primarily due to reduced planned and unplanned maintenance. Shell's integrated business model — spanning upstream production, refining, chemicals, and one of the industry's largest energy trading operations — allowed the supermajor to capture margin gains across multiple segments simultaneously, even as upstream LNG volumes came under pressure.

Strong refining and chemical margins further supported earnings. Shell's global indicative refining margin climbed to $24 per barrel, up from $17 in the first quarter. The global indicative chemical margin doubled to $270 per ton, compared with $139 per ton in the prior quarter.

The supermajor's profits surpassed expectations despite lower LNG volumes caused by the impact of the Middle East conflict on production in Qatar. Earlier in July, Shell had already signaled that it would book significantly higher oil and LNG trading results for the second quarter, as the Iran war drove extreme volatility across energy commodity markets.

Free cash flow surged to $17.524 billion for the quarter, compared with $6.531 billion in the same quarter of 2025. Shell also announced $3 billion in share buybacks scheduled for completion in the third quarter, marking the 19th consecutive quarter in which the company has committed to at least $3 billion in share repurchases — a streak representing cumulative buybacks of well over $50 billion and reflecting CEO Wael Sawan's sustained emphasis on shareholder returns since taking the role in 2023.

"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," said CEO Wael Sawan.

Other European oil majors, including Eni, TotalEnergies, and Equinor, also reported sharp year-over-year profit increases, as surging oil and gas prices during the Middle East crisis delivered windfall earnings to the industry's largest energy firms. The sector-wide results recall the 2022 profit surge that prompted several European governments, including the UK and EU member states, to impose windfall taxes on oil and gas companies.

By Tsvetana Paraskova for Oilprice.com