Shell Flags Weaker Q4 Earnings as Tax Adjustments and Trading Pressures Bite

Core Viewpoint - Shell has updated its fourth-quarter 2025 outlook, indicating softer earnings across various business lines due to tax-related adjustments, weaker trading conditions, and lower downstream margins [1] Group-Level Performance - Group-level adjusted earnings and cash flow are expected to face pressure compared to earlier quarters, despite stable production in Shell's core upstream and integrated gas portfolios [1] Integrated Gas Segment - Production in Integrated Gas is projected between 930,000 and 970,000 barrels of oil equivalent per day (kboe/d) for Q4, remaining flat compared to Q3, with LNG liquefaction volumes forecasted at 7.5 to 7.9 million tonnes [2] Upstream Production - Upstream production is anticipated to be between 1.84 and 1.94 million boe/d, incorporating the Adura joint venture in the UK, with operating expenses and depreciation expected to stay within historical ranges [3] Marketing Business - The Marketing business is expected to see lower sales volumes of 2.65 to 2.75 million barrels per day, down from 2.82 million barrels per day in Q3, with adjusted earnings projected to fall below Q4 2024 levels due to a non-cash deferred tax adjustment [4] Chemicals and Products Segment - The Chemicals and Products segment is expected to perform the weakest, with adjusted earnings projected to post a "significant loss" due to a deferred tax adjustment, with earnings anticipated to be below break-even for the quarter [5] Refining Margins - Refining margins are forecasted to rise to an indicative $14 per barrel, up from $12 per barrel in Q3, while chemicals margins are expected to decline to $140 per tonne from $160 per tonne [6] Oil Sands Production - Following a Canadian oil sands asset swap, oil sands production is expected to be around 20,000 boe/d in Q4, with a reduction in Chemicals and Products adjusted earnings offset by lower non-controlling interests at the group level [7] Renewables and Energy Solutions - Adjusted earnings in Renewables and Energy Solutions are expected to range from a loss of $200 million to a gain of $200 million, indicating volatility in Shell's lower-carbon portfolio, while corporate adjusted earnings are forecasted at a loss of $400 million to $600 million [8]