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Shell's Q3 Outlook Shows Strength in LNG and Refining Operations
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Key Takeaways
Shell expects Integrated Gas production to rise, with Q3 output forecast at 740,000-780,000 boe/d.
Refining margins are projected to jump to $42 per barrel, while refinery utilization reaches 93%-97%.
Lower LNG volumes, $300 million in exploration write-offs and geopolitical uncertainty weigh on the outlook.
Shell plc’s (SHEL - Free Report) third-quarter 2026 outlook points to stronger activity across its Integrated Gas business. Production is expected to reach 740,000-780,000 barrels of oil equivalent per day (boe/d), up from 631,000 boe/d in the second quarter. LNG liquefaction volumes, however, are forecast at 7.2-7.6 million tonnes, slightly below the 7.7 million tonnes reported in the second quarter. The outlook includes the effect of the acquisition of ARC Resources, which was completed on Sept. 2, 2026. Shell also expects Trading & Optimization to remain broadly in line with the prior quarter.
Upstream Production Remains Resilient
Shell expects upstream production of 1.74-1.84 million boe/d in the third quarter, compared with 1.82 million boe/d in the second quarter. The company also expects about $300 million in exploration well write-offs during the quarter. While production is broadly resilient, the outlook reflects continued challenges across the upstream portfolio and the impact of a volatile geopolitical environment.
Shell’s CEO, Wael Sawan, has also highlighted the recovery in Middle East oil flows to roughly 80% of pre-war levels on Tuesday. The rebound underscores the resilience of regional supply and could help ease some pressure on global energy markets.
Refining Strength Could Support Earnings
Shell’s Chemicals and Products business offers another positive signal. Its indicative refining margin is expected to rise sharply to $42 per barrel in the third quarter from $24 per barrel in the prior quarter. At the same time, the indicative chemicals margin is projected to decline to $208 per tonne from $270 per tonne. Refinery utilization is expected at 93%-97%, compared with 102% in the second quarter.
Shell is also expanding its exploration footprint. Last month, the company agreed to acquire a 30% interest in BP’s Conifer prospect in the U.S. Gulf of Mexico and a 50% stake in the Tupinamba exploration block in Brazil’s Santos Basin. These additions could strengthen Shell’s longer-term upstream portfolio.
Overall, Shell’s third-quarter outlook presents a mixed but constructive picture. Higher Integrated Gas production and stronger refining margins provide meaningful positives, while lower LNG volumes, upstream write-offs and geopolitical uncertainty remain key factors to watch.
SHEL’s Zacks Rank & Other Key Picks
London-based Shell is one of the primary oil supermajors — a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL sports a Zacks Rank #1 (Strong Buy).
Drilling Tools International is a global oilfield services provider focused on supplying downhole tools used in horizontal and directional drilling. The Zacks Consensus Estimate for DTI’s 2026 revenues indicates 1.6% year-over-year growth.
Forum Energy is a global oilfield products company, serving the subsea, drilling, completion, production and infrastructure sectors of the oil and natural gas industry. The Zacks Consensus Estimate for FET’s 2026 earnings indicates 536.5% year-over-year growth.
Montauk Renewables is a fully integrated renewable energy company that specializes in the management, recovery and conversion of biogas into renewable energy. The Zacks Consensus Estimate for MNTK’s 2026 earnings indicates 1100% year-over-year growth.
View the Zacks #1 Rank List
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Shell's Q3 Outlook Shows Strength in LNG and Refining Operations
Key Takeaways
Shell plc’s (SHEL - Free Report) third-quarter 2026 outlook points to stronger activity across its Integrated Gas business. Production is expected to reach 740,000-780,000 barrels of oil equivalent per day (boe/d), up from 631,000 boe/d in the second quarter. LNG liquefaction volumes, however, are forecast at 7.2-7.6 million tonnes, slightly below the 7.7 million tonnes reported in the second quarter. The outlook includes the effect of the acquisition of ARC Resources, which was completed on Sept. 2, 2026. Shell also expects Trading & Optimization to remain broadly in line with the prior quarter.
Upstream Production Remains Resilient
Shell expects upstream production of 1.74-1.84 million boe/d in the third quarter, compared with 1.82 million boe/d in the second quarter. The company also expects about $300 million in exploration well write-offs during the quarter. While production is broadly resilient, the outlook reflects continued challenges across the upstream portfolio and the impact of a volatile geopolitical environment.
Shell’s CEO, Wael Sawan, has also highlighted the recovery in Middle East oil flows to roughly 80% of pre-war levels on Tuesday. The rebound underscores the resilience of regional supply and could help ease some pressure on global energy markets.
Refining Strength Could Support Earnings
Shell’s Chemicals and Products business offers another positive signal. Its indicative refining margin is expected to rise sharply to $42 per barrel in the third quarter from $24 per barrel in the prior quarter. At the same time, the indicative chemicals margin is projected to decline to $208 per tonne from $270 per tonne. Refinery utilization is expected at 93%-97%, compared with 102% in the second quarter.
Shell is also expanding its exploration footprint. Last month, the company agreed to acquire a 30% interest in BP’s Conifer prospect in the U.S. Gulf of Mexico and a 50% stake in the Tupinamba exploration block in Brazil’s Santos Basin. These additions could strengthen Shell’s longer-term upstream portfolio.
Overall, Shell’s third-quarter outlook presents a mixed but constructive picture. Higher Integrated Gas production and stronger refining margins provide meaningful positives, while lower LNG volumes, upstream write-offs and geopolitical uncertainty remain key factors to watch.
SHEL’s Zacks Rank & Other Key Picks
London-based Shell is one of the primary oil supermajors — a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL sports a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector may consider some other top-ranked stocks like Drilling Tools International Corporation (DTI - Free Report) , Forum Energy Technologies, Inc. (FET - Free Report) and Montauk Renewables, Inc. (MNTK - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Drilling Tools International is a global oilfield services provider focused on supplying downhole tools used in horizontal and directional drilling. The Zacks Consensus Estimate for DTI’s 2026 revenues indicates 1.6% year-over-year growth.
Forum Energy is a global oilfield products company, serving the subsea, drilling, completion, production and infrastructure sectors of the oil and natural gas industry. The Zacks Consensus Estimate for FET’s 2026 earnings indicates 536.5% year-over-year growth.
Montauk Renewables is a fully integrated renewable energy company that specializes in the management, recovery and conversion of biogas into renewable energy. The Zacks Consensus Estimate for MNTK’s 2026 earnings indicates 1100% year-over-year growth.