Business Context and Reporting Period
This Form 6-K filing by Shell plc, dated July 7, 2026, provides an updated outlook for the second quarter of 2026 (Q2'26). The report compares Q2'26 expectations against actual Q1'26 results. Final Q2'26 results are scheduled for publication on July 30, 2026. The outlook excludes identified items and reflects the impact of ongoing geopolitical events, specifically the Middle East conflict.
Key Financial Metrics and Operational Outlook
The filing details segment-specific production, operating expenses, and earnings expectations for Q2'26.
| Segment | Key Metric | Q1'26 Actual | Q2'26 Outlook |
|---|---|---|---|
| Integrated Gas | Production (kboe/d) | 909 | 610 - 650 |
| Integrated Gas | LNG Liquefaction (MT) | 7.9 | 7.4 - 7.8 |
| Upstream | Production (kboe/d) | 1,843 | 1,750 - 1,850 |
| Marketing | Sales Volumes (kb/d) | 2,627 | 2,550 - 2,650 |
| Chemicals & Products | Indicative Refining Margin | $17/bbl | ~$20/bbl |
| Chemicals & Products | Indicative Chemicals Margin | $139/tonne | ~$240/tonne |
| Renewables & Energy Solutions | Adjusted Earnings ($B) | 0.3 | (0.3) - 0.3 |
| Corporate | Adjusted Earnings ($B) | (0.9) | (0.7) - (0.5) |
Cash Flow and Working Capital: Cash flow from operating activities (CFFO) tax paid is expected to range from $2.6B to $3.4B. Working capital movements are projected to be between $1B and $6B, a significant shift from the $11.2B outflow in Q1'26, attributed to unprecedented commodity price volatility. Financial derivative instrument movements are expected to range from $(1)B to $4B.
Net Debt: The filing defines Net Debt but does not provide a specific numerical value for the current period or the outlook.
Material Changes vs. Prior Period
- Integrated Gas Production: Expected to decline significantly from 909 kboe/d in Q1'26 to 610-650 kboe/d in Q2'26 due to the impact of the Middle East conflict on Qatari volumes.
- Refining and Chemicals Margins: Indicative margins are expected to improve in Q2'26 compared to Q1'26 ($17/bbl to ~$20/bbl for refining; $139/tonne to ~$240/tonne for chemicals). However, management notes that realized margins remain lower than calculated indicative margins due to market dislocations.
- Working Capital: A major swing is anticipated, moving from a $11.2B negative impact in Q1'26 to a positive or neutral range of $1B to $6B in Q2'26.
- Renewables Earnings: Adjusted earnings for Renewables and Energy Solutions are expected to range from a loss of $0.3B to a profit of $0.3B, compared to a $0.3B profit in Q1'26.
Guidance, Risks, and Management Commentary
Management Commentary: Trading and Optimisation in Integrated Gas is expected to be significantly higher than Q1'26. Marketing adjusted earnings are expected to be in line with Q1'26. Trading and Optimisation in Chemicals and Products is expected to be in line with Q1'26.
Risks and Contingencies:
- Geopolitical Risk: The Middle East conflict is explicitly cited as a driver for reduced Qatari LNG volumes and production.
- Market Volatility: Unprecedented volatility in commodity prices is driving significant working capital fluctuations.
- Market Dislocations: Realized margins in refining and chemicals are lower than indicative margins due to market dislocations.
- Forward-Looking Statements: The filing includes standard disclaimers regarding risks such as price fluctuations, regulatory changes, climate change, and regional conflicts (including Russia-Ukraine and the Middle East).
Guidance: The 'Quarterly Databook' contains full-year price and margin sensitivities, though management notes these may not reflect realized margins in an individual quarter due to the Middle East situation. Consensus estimates managed by Vara Research are expected to be published on July 22, 2026.
Investor Verification Checklist
- Verify the specific impact of the Middle East conflict on Qatari LNG volumes and the duration of the production reduction.
- Confirm the reconciliation between "Indicative" margins and "Realized" margins in the final Q2'26 results to understand the extent of market dislocations.
- Monitor the final working capital movement figures to assess the cash flow impact of commodity price volatility.
- Review the final Q2'26 Adjusted Earnings for the Renewables and Energy Solutions segment to determine if the segment returned to profitability or recorded a loss.
- Check the July 30, 2026, final results for any identified items excluded from this outlook that may materially affect GAAP results.