Shell Profit Misses | Rigzone

Shell Plc said its fourth-quarter profit slumped, undershooting expectations as lower crude prices, a weak oil-trading performance and a struggling chemicals business dented earnings.

Europe’s largest oil company reported adjusted net income of $3.26 billion for the quarter, down 11% from a year earlier and lower than the average analyst estimate of $3.51 billion. Shell maintained its quarterly share buyback of $3.5 billion even as lower oil prices challenge its plan to boost investor returns through 2030. Production rose slightly. 

Investors are increasingly focused on Shell’s growth outlook after Chief Executive Officer Wael Sawan cut costs and shed underperforming assets. His goal to close a large valuation gap with Exxon Mobil Corp. and Chevron Corp. has gotten harder this year after the shares of the US rivals soared, buoyed by strong production from low-cost oil fields in Guyana, the Permian Basin and Kazakhstan. 

Shell’s stock was the best performer among the world’s top five oil majors in dollar terms last year, but since mid-November the gains have fizzled and so far in 2026 it’s been lagging its peers.

The company’s 2% year-on-year production growth in the quarter pales in comparison to that of the Americans. Chevron increased output by 20% in the fourth quarter from a year earlier, thanks to volumes from its Kazakhstan project and integration of the Hess Corp. portfolio. Exxon expanded production by 15% driven by output in the Permian, as well as from its massive Guyana project. 

Brazil and the Gulf of Mexico are key to Shell’s production, as well as its new UK North Sea joint venture with Equinor ASA. But investors are less excited about these plays than those of Exxon and Chevron. Elsewhere in the world, Shell is seeking to find pathways to commerciality for its Namibia oil discoveries and has re-entered Libya fossil-fuel development. 

Oil prices tumbled 18% in 2025 as rising production in and outside the OPEC+ alliance led to widespread expectations of a glut forming this year. Benchmark Brent futures have recovered some of the losses so far in 2026, trading around $68 a barrel, as US-Iran tensions add a geopolitical risk premium to prices. But they remain well below the 2025 highs above $80.

Shell’s profit miss comes after analysts revised down their forecasts, following a company update in January that warned its oil trading performance in the quarter had been “significantly lower” than in the previous and that the troubled chemicals division lost money.

Shell’s 2026 capital spending plan remains $20 to $22 billion, after the company’s 2025 expenditures came in slightly less than that range. Sawan and Chief Financial Officer Sinead Gorman have been reining in Shell’s spending during their three years at the helm.

The London-based firm reported an increase in gearing — the ratio of net debt to equity — to 20.7% in 2025, from 17.7% the previous year.

Losses in the chemicals division were significant enough to offset stronger refining margins, which were a boost for Exxon when the Texas giant reported results late last month. 

The chemicals business has been a drag on earnings Sawan has pledged to address, but he’s cautioned it could be a long process.

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