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Shell refining margins forecast to nearly double to $42 a barrel
Shell expects to make nearly double the profit from every barrel of fuel it refines this quarter: in a market trading update on Wednesday, the company put Shell refining margins at $42 a barrel for July to September, up from $24 in the second quarter and a previous high of about $28.
By Haut Monde Post
• October 7, 2026
• 3 Min Read
Margins far above the previous peak
Shell's market trading update on Wednesday put the July-to-September refining margin at $42 a barrel, against $24 in the second quarter and a previous high of about $28. The company expects refineries to make almost double the profit per barrel of fuel produced because record prices are being driven by shortages around the world.
- •$42 a barrel: Shell's forecast margin for the July-to-September period
- •$24 a barrel: the margin earned in the second quarter
- •about $28 a barrel: the previous high
Diesel squeeze behind the jump
The widening spread reflects refined fuel prices, including diesel, rising steeply relative to crude oil while war-damaged refineries in the Middle East and Russia stay shut, squeezing supplies. The diesel price premium over the global oil benchmark jumped above $100 a barrel for the first time, pointing to record-high profits from refining crude into fuels. Shell operates some of Europe's largest refineries, alongside the French energy company TotalEnergies, which holds the continent's largest refining capacity.
TotalEnergies chief executive Patrick Pouyanné told an industry conference in London this week:
"We're doing really well by being integrated. Integration means your refineries in Europe, which you thought were liabilities, are suddenly becoming goldmines."
Record profit and record share price
The Middle East crisis helped Shell, Europe's biggest oil and gas company, to a profit of almost $10bn (£7.5bn) in the second quarter of 2026, more than double the same period a year earlier and its second-highest quarterly earnings on record.
- •Shell, now the second-largest company on the UK's FTSE 100 index, saw its market value climb to a record high of £36.23 a share at the end of last month
- •Oil prices retreated from their 2026 peak of above $115 a barrel in spring to about $100, yet the share price still set its record
- •European gas prices doubled from the previous year over the summer, and record-high diesel prices lifted the stock
- •Brent crude averaged $85.60 a barrel in the third quarter, down from $97.05 in the second but well above the $68.14 recorded in the third quarter last year
Gas output set to climb
Shell's gas production has been hard-hit by the Iran crisis, which severely damaged one of its key gas processing facilities in the Gulf and cut output from its prewar level of 900,000 barrels of oil equivalent per day by a third.
The price backdrop has moved sharply higher: Europe's benchmark gas price index more than doubled to €70.50 (£60) in August, after gas averaged more than €48 a megawatt-hour in the second quarter before leaping to almost €64/MWh in the third.
In Wednesday's update, Shell said it expects third-quarter gas production of about 740,000–780,000 barrels of oil equivalent per day, up from its previous forecast of 570,000–630,000 BOED and second-quarter output of about 631,000 BOED.
