Shell first quarter 2026 update note
Rhea-AI Summary
Shell (SHEL) updated its Q1 2026 outlook on April 8, 2026, ahead of full results due May 7, 2026, and warned of increased uncertainty from the Middle East conflict.
Key items: indicative refining margin raised to $17/bbl, working capital swings to $(15)–(10) billion, and a $3–4 billion increase in variable shipping lease components affecting non-cash net debt.
Positive
- Indicative refining margin increased to $17/bbl (Q1’26)
- Refinery utilisation maintained at 95%–99% for Q1’26
Negative
- Working capital expected swing to $(15)–(10) billion in Q1’26
- Non-cash net debt to rise by $3–4 billion from variable shipping lease components
- Corporate adjusted loss widens to $(1.0)–(0.8) billion in Q1’26
News Market Reaction – SHEL
On the day this news was published, SHEL declined 2.27%, reflecting a moderate negative market reaction. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $6.22B from the company's valuation, bringing the market cap to $267.85B at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Momentum scanner shows 8 energy peers (e.g., BP, PBR, XOM, CVX) moving down together (sector note: median move -5.8%), indicating broader Energy-sector pressure around this outlook.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 07 | Share buy-back | Positive | +0.5% | Announcement of 1,279,747 shares repurchased for cancellation under buy-back. |
| Apr 07 | PDMR shareholding | Positive | +0.5% | PDMRs acquired dividend shares following interim dividend payment. |
| Apr 02 | Share buy-back | Positive | +1.2% | Disclosure of 858,749 ordinary shares repurchased and cancelled. |
| Apr 01 | Share buy-back | Positive | -1.0% | Repurchase and cancellation of 2,379,170 shares under ongoing programme. |
| Mar 31 | Share buy-back | Positive | +0.3% | Buy-back disclosure for 1,337,682 shares cancelled across venues. |
Recent news flow has focused on buy-backs and dividend share allocations, with share price reactions mostly positive but one notable divergence.
Over the last weeks, Shell has repeatedly reported share repurchases and dividend-related PDMR share accruals. Between Mar 31 and Apr 7, 2026, multiple “Transaction in Own Shares” notices and a PDMR shareholding update coincided with modestly positive price moves on most days, reinforcing capital-return messaging. One buy-back update on Apr 1 saw a small negative reaction. Today’s detailed Q1 2026 outlook adds operational and financial guidance on volumes, margins, opex and taxation to that backdrop.
Market Pulse Summary
This announcement provides a granular Q1 2026 outlook across Integrated Gas, Upstream, Marketing, Chemicals & Products, and Renewables, highlighting shifts in production ranges, margins, opex and tax. It also flags potential $3–4B non-cash net-debt effects from shipping leases and significant working capital swings amid commodity volatility. Investors may watch realised refining and chemicals margins, production versus guidance, and cash flow items when results are published on May 7, 2026.
Key Terms
kboe/d technical
lng technical
kb/d technical
indicative refining margin financial
indicative chemicals margin financial
working capital financial
depreciation, depletion and amortisation financial
adjusted earnings financial
AI-generated analysis. Not financial advice.
The following is an update to the first quarter 2026 outlook and gives an overview of our current expectations for the first quarter. Outlooks presented may vary from the actual first quarter 2026 results and are subject to finalisation of those results, which are scheduled to be published on May 7, 2026. Unless otherwise indicated, all outlook statements exclude identified items.
See appendix for the definition of the non-GAAP measure used and the most comparable GAAP measure.
In light of the ongoing situation in the Middle East, the outlook provided is subject to increased uncertainty. For details see the impact of the conflict in the Middle East on Shell’s activities on shell.com.
Integrated Gas
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Production (kboe/d) | 948 | 880 - 920 | Reflects the impact of the Middle East conflict on Qatari volumes. |
| LNG liquefaction volumes (MT) | 7.8 | 7.6 - 8.0 | Reflects the ramp-up of LNG Canada, offset by Australia weather constraints and Qatar LNG outages. |
| Underlying opex | 1.2 | 1.1 - 1.3 | |
| Pre-tax depreciation | 1.5 | 1.3 - 1.7 | |
| Taxation charge | 0.8 | 0.4 - 0.7 | |
| Other Considerations: | |||
| Trading & Optimisation is expected to be in line with Q4’25. Note: Long‑term LNG contracts usually have a pricing lag (e.g. JCC‑3). | |||
Upstream
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Production (kboe/d) | 1,892 | 1,760 - 1,860 | Includes reduced production following the Adura JV incorporation. |
| Underlying opex | 2.4 | 2.0 - 2.4 | |
| Pre-tax depreciation | 2.7 | 2.4 - 3.0 | |
| Taxation charge | 1.7 | 1.6 - 2.4 | Reflects the Nigeria onshore and UK portfolio changes since Q1’25. |
| Other Considerations: | |||
| - | |||
Marketing
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Sales volumes (kb/d) | 2,701 | 2,550 - 2,650 | |
| Underlying opex | 2.6 | 2.2 - 2.6 | |
| Pre-tax depreciation | 0.6 | 0.5 - 0.7 | |
| Taxation charge | 0.4 | 0.4 - 0.7 | |
| Other Considerations: | |||
| Marketing adjusted earnings are expected to be significantly higher than Q1’25. | |||
Chemicals and Products
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Indicative refining margin* | |||
| Indicative chemicals margin* | The Chemicals sub-segment adjusted earnings are expected to be at a similar level as Q1’25. | ||
| Refinery utilisation | |||
| Chemicals utilisation | |||
| Underlying opex | 2.2 | 1.7 - 2.1 | |
| Pre-tax depreciation | 0.9 | 0.8 - 1.0 | |
| Taxation charge / (credit) | 0.2 | 0.3 - 0.7 | |
| Other Considerations: | |||
| Trading & Optimisation is expected to be significantly higher than Q4’25. | |||
*See appendix
Renewables and Energy Solutions
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Adjusted Earnings | 0.1 | 0.2 - 0.7 | Trading & Optimisation is expected to be significantly higher than Q4’25. |
Corporate
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| Adjusted Earnings | (0.6) | (1.0) - (0.8) |
Shell Group
| $ billions | Q4’25 | Q1’26 Outlook | Comment |
| CFFO: | |||
| Tax paid | 2.6 | 2.0 - 2.8 | |
| Financial Derivative Instruments movements | (0.1) | (1) - 4 | |
| Working capital | 1.3 | (15) - (10) | Reflects impact of unprecedented volatility in commodity prices on inventory and receivables. |
| Other Shell Group Considerations: | |||
| Non-cash net-debt expected to be impacted by | |||
Guidance
The ‘Quarterly Databook’ contains guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities.
Consensus
The company compiled consensus, managed by Vara Research, is expected to be published on April 29, 2026.
Appendix
Indicative Margins
| Chemicals & Products | Q4’25 | Q1’26 Updated Outlook |
| Indicative refining margin | ||
| Indicative chemicals margin |
Volume Data
| Operational Metrics | Q4’25 | Q1’26 QPR Outlook | Q1’26 Updated Outlook |
| Integrated Gas | |||
| Production (kboe/d) | 948 | 920 - 980 | 880 - 920 |
| LNG liquefaction volumes (MT) | 7.8 | 7.4 - 8.0 | 7.6 - 8.0 |
| Upstream | |||
| Production (kboe/d) | 1,892 | 1,700 - 1.900 | 1,760 - 1,860 |
| Marketing | |||
| Sales volumes (kb/d) | 2,701 | 2,550 - 2,750 | 2,550 - 2,650 |
| Chemicals & Products | |||
| Refinery utilisation | |||
| Chemicals utilisation |
Underlying Opex
Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors. For further details see the 4th Quarter 2025 and full year unaudited results.
| $ billions | Q4’25 | Q4’25 Adjusted | Q1’26 Updated Outlook |
| Production and manufacturing expenses | 5.8 | ||
| Selling, distribution and administrative expenses | 3.4 | ||
| Research and development | 0.3 | ||
| Operating Expenses (Opex) | 9.6 | 9.6 | |
| Less: Identified Items | 0.1 | ||
| Underlying Opex | 9.4 | ||
| of which: | |||
| Integrated Gas | 1.2 | 1.2 | 1.1 - 1.3 |
| Upstream | 2.5 | 2.4 | 2.0 - 2.4 |
| Marketing | 2.7 | 2.6 | 2.2 - 2.6 |
| Chemicals and Products | 2.2 | 2.2 | 1.7 - 2.1 |
| Renewables and Energy Solutions | 0.6 | 0.6 |
Depreciation, depletion and amortisation
| $ billions | Q4’25 | Q4’25 Adjusted | Q1’26 Updated Outlook |
| Depreciation, Depletion & Amortisation | 6.6 | 6.6 | |
| Less: Identified Items | 0.8 | ||
| Pre-tax depreciation (as Adjusted) | 5.8 | ||
| of which: | |||
| Integrated Gas | 1.5 | 1.5 | 1.3 - 1.7 |
| Upstream | 2.9 | 2.7 | 2.4 - 3.0 |
| Marketing | 0.9 | 0.6 | 0.5 - 0.7 |
| Chemicals and Products | 1.1 | 0.9 | 0.8 - 1.0 |
| Renewables and Energy Solutions | 0.3 | 0.1 |
Taxation Charge
| $ billions | Q4’25 | Q4’25 Adjusted | Q1’26 Updated Outlook |
| Taxation Charge | 2.7 | 2.7 | |
| Less: Identified Items and Cost of supplies adjustment | (0.2) | ||
| Taxation Charge (as Adjusted) | 2.9 | ||
| of which: | |||
| Integrated Gas | 0.9 | 0.8 | 0.4 - 0.7 |
| Upstream | 1.7 | 1.7 | 1.6 - 2.4 |
| Marketing | 0.3 | 0.4 | 0.4 - 0.7 |
| Chemicals and Products | — | 0.2 | 0.3 - 0.7 |
| Renewables and Energy Solutions | 0.1 | 0.1 |
Adjusted Earnings
The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest. For further details see the 4th Quarter 2025 and full year unaudited results.
| $ billions | Q4’25 | Q4’25 Adjusted | Q1’26 Updated Outlook |
| Income/(loss) attributable to Shell plc shareholders | 4.1 | 4.1 | |
| Add: Current cost of supplies adjustment attributable to Shell plc shareholders | 0.3 | ||
| Less: Identified items attributable to Shell plc shareholders | 1.2 | ||
| Adjusted Earnings | 3.3 | ||
| of which: | |||
| Renewables and Energy Solutions | (0.1) | 0.1 | 0.2 - 0.7 |
| Corporate | (0.6) | (0.6) | (1.0) - (0.8) |
Working Capital
Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.
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Cautionary Note
The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience to reference Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
The numbers presented in this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
Forward-Looking statements
This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; ‘‘anticipate’’; “aspire”; “aspiration”; ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; “desire”; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; “vision”; ‘‘will’’; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks, including climate change; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including tariffs and regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, regional conflicts, such as the Russia-Ukraine war and the conflict in the Middle East, and a significant cyber security, data privacy or IT incident; (n) the pace of the energy transition; and (o) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2025 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, April 8, 2026. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.
Shell’s net carbon intensity
Also, in this announcement we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s net-zero emissions target
Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our combined Scope 1 and 2 target, NCI targets and our oil products ambition over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
Forward-Looking Non-GAAP measures
This announcement may contain certain forward-looking non-GAAP measures such as Adjusted Earnings, Cash flow from operating activities excluding working capital movements, Cash capital expenditure, Net debt and Underlying operating expense.
Adjusted Earnings are measures used to evaluate Shell’s performance in the period and over time.
The “Adjusted Earnings” are measures which aim to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items.
Adjusted Earnings is defined as income/(loss) attributable to shareholders adjusted for the current cost of supplies and excluding identified items. All items include the non-controlling interest component.
Cash flow from operating activities excluding working capital movements is a measure used by Shell to analyse its operating cash generation over time excluding the timing effects of changes in inventories and operating receivables and payables from period to period. Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables. Cash capital expenditure is the sum of the following lines from the Consolidated Statement of Cash flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities. Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances. Underlying operating expenses is a measure of Shell’s cost management performance and aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors. Underlying operating expenses comprises the following items from the Consolidated statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses and removes the effects of identified items such as redundancy and restructuring charges or reversals, provisions or reversals and others.
We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.
The contents of websites referred to in this announcement do not form part of this announcement.
We may have used certain terms, such as resources, in this announcement that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.
