Shell reports fourth-quarter profit drop but sustains shareholder returns

Shell plc on Feb. 5 reported adjusted earnings of about $3.3 billion for fourth-quarter 2025, a decrease compared with earlier quarters of 2025, and below market expectations, as weaker oil and gas prices, softer trading performance, and weaker chemicals margins weighed on results. For the full 2025 fiscal year, Shell reported adjusted earnings of $18.5 billion, falling short of expectations, compared to an annual profit of $23.72 billion in the previous year.

Despite the earnings decline, shell posted cash flow from operations of roughly $9.4 billion in the quarter, underscoring continued resilience in its core businesses even as commodity markets softened. For the full year, Shell delivered an estimated $26 billion in free cash flow, supported by cost reductions and steady operational execution.

Despite the lower quarterly profit, Shell continued to prioritize investor distributions. The company raised its interim dividend by 4% to $0.372 per share and announced a new $3.5 billion share buyback program, extending a multi-quarter streak of repurchases. At year-end, net debt rose to about $45.7 billion.

Chief executive officer Wael Sawan said Shell’s 2025 performance showed “accelerated momentum,” highlighting cumulative cost savings since 2022 and the company’s ability to generate cash even in a weaker pricing environment.

Looking ahead, Shell reaffirmed its 2026 capital spending guidance of $20–22 billion, while signaling continued portfolio actions to focus on higher-return assets. The company is also targeting further structural cost reductions through 2028.

Operational highlights

Integrated Gas generated $1.66 billion in adjusted earnings in fourth-quarter 2025, down from $1.70 billion in third-quarter 2025, as higher tax charges outweighed the benefit of higher volumes. LNG liquefaction volumes rose to 7.8 million tonnes, up from 7.3 million tonnes in third-quarter, while LNG sales volumes increased to 19.8 million tonnes from 18.9 million tonnes. Production averaged 948,000 boe/d, compared with 934,000 boe/d in the prior quarter.

Shell’s Upstream segment delivered $1.57 billion in adjusted earnings in fourth-quarter 2025, down from $1.80 billion in third-quarter 2025, reflecting lower liquids price realizations. Realized liquids prices fell to $59/bbl from $64/bbl. Total production averaged 1.892 million boe/d, up from 1.832 million boe/d in third-quarter, supported by higher gas production.

Marketing posted $578 million in adjusted earnings in fourth-quarter 2025, sharply lower than $1.3 billion in third-quarter 2025, as the segment faced seasonally lower volumes and a non-cash deferred tax adjustment in a joint venture. Total marketing sales volumes declined to 2.70 million b/d, down from 2.82 million b/d in third-quarter. Mobility volumes fell to 1.96 million b/d from 2.05 million b/d, while lubricants slipped to 83,000 b/d from 88,000 b/d.

Chemicals & Products recorded an adjusted loss of $66 million in fourth-quarter 2025, compared with adjusted earnings of $550 million in third-quarter 2025, reflecting seasonally lower trading and optimization, continued weak chemicals margins, and another non-cash deferred tax adjustment. Indicative chemical margins declined to $140/tonne from $160/tonne, and chemicals plant utilization dropped to 76% from 80%. However, refining indicators improved, with the indicative refining margin rising to $13.80/bbl from $11.60/bbl.