Shell anticipates record-high profits from its refining operations in the third quarter, driven by global fuel shortages that have caused refined-product prices to surge. The company projects refining margins to reach approximately $42 per barrel for the July-September period, a significant increase from $24 per barrel in the previous quarter. This forecast surpasses the prior record of around $28 per barrel, set during the early phase of the Russia-Ukraine conflict.
The profitability of refineries has benefited from the widening gap between crude oil costs and refined fuel prices. This situation has been exacerbated by damage to refineries in the Middle East and Russia, which has diminished global fuel supplies. Meanwhile, crude oil prices have decreased from their earlier peaks. In the third quarter, the global benchmark Brent crude averaged $85.60 a barrel, down from $97.05 in the preceding quarter but still higher than the $68.14 average from the same period last year.
Diesel prices have also experienced a sharp increase, with the premium over the global oil benchmark exceeding $100 a barrel for the first time. This rise has created advantageous conditions for refineries, particularly in Europe and the United States.
In addition to its refining operations, Shell expects a boost in gas production following the acquisition of Canada’s ARC Resources. The company forecasts production levels to be between 740,000 and 780,000 barrels of oil equivalent per day, compared to its earlier projection of 570,000 to 630,000 barrels per day.