By Stephanie Kelly and Shadia Nasralla
LONDON, July 30 (Reuters) - Shell's adjusted earnings, its measure of net profit, more than doubled from last year to $9.84 billion in the second quarter, beating
expectations, helped by higher energy prices and increased market volatility during the Middle East conflict.
Higher oil and gas prices, stronger LNG and oil trading and improved chemicals margins helped support the British major's earnings, offsetting lower sales volumes caused by disruptions to its Qatar operations.
Analysts had expected net profit of $8.92 billion, according to a company-provided consensus, compared with $4.26 billion a year earlier.
Shell has benefited from the market disruptions and volatility caused by the U.S.-Israeli war with Iran, creating more opportunities for the large trading businesses operated by companies such as Shell, BP and TotalEnergies.
HIGHEST PROFIT SINCE 2022
Shell reported its highest quarterly profit and its highest operating cash flow, including working-capital movements, since 2022, when Russia's invasion of Ukraine upended global energy markets. Still, it said it would maintain the pace of its share buyback programme at $3 billion over the next three months.
Profits from Shell's integrated gas business, which includes the world's biggest trading desk for the fuel, comfortably beat expectations at $2.7 billion, 55% above last year's.
Its chemicals and products unit, home to its oil product trading desk, also outperformed expectations at $2.3 billion, compared with $118 million a year ago.
Production at Shell's Pearl gas-to-liquids plant in Qatar was halted in March after an attack damaged one of the facility's two trains. Shell has said repairs could take about a year.
The Middle East accounts for about 20% of Shell's oil and gas production, or 550,000 barrels of oil equivalent per day, with about 10% linked to Qatar.
Shell's net debt dropped to $41.8 billion, from $52.6 billion at the end of of the first quarter 2026. Its gearing, or debt-to-equity ratio including leases, fell to 18.7% from 23.2% last quarter and below Shell's stated comfort level of 20%.
(Reporting by Stephanie Kelly and Shadia Nasralla, Editing by Louise Heavens and Tomasz Janowski)
