Shell expects a significant decline in trading results for its strategically important "Integrated Gas" sector in the second quarter. The company announced on Monday that the trading and optimization result will be "significantly below" the level of the first quarter due to high price fluctuations in the global energy markets.
Specifically, the company expects an adjusted profit between 1.4 and 1.8 billion US dollars for the gas division, after exactly 1.4 billion US dollars in the first quarter. Simultaneously, Shell also slightly lowered the production forecast: Instead of the previously announced 890,000 to 950,000 barrels of oil equivalent per day, 900,000 to 940,000 are now expected. The average of the forecast thus remains unchanged at 920,000 barrels daily.
The figures come at a time when the entire European oil and gas industry is under pressure. According to calculations by Jefferies analysts Giacomo Romeo and Kai Ye Loh, the sector will record an average profit decline of 17% in the second quarter. A key driver: a ten percent drop in oil prices compared to the previous quarter – triggered, among other things, by U.S. tariffs on Chinese imports imposed under President Trump at the beginning of April as part of the “Liberation Day” package. The subsequent 90-day suspension of the measures brought little sustainable stability.
Although geopolitical tensions between Israel and Iran briefly caused a price increase towards the end of the quarter, according to Jefferies, this effect could not permanently offset the structural burdens of the market.
Shell's upstream production – the extraction of crude oil and natural gas – is estimated at 1.66 to 1.76 million barrels of oil equivalent per day, down from 1.855 million in the first quarter. The decline is partly due to scheduled maintenance and the sale of the Nigeria business SPDC.
LNG exports are expected to amount to 6.4 to 6.8 million tons, while the refinery margin improves quarterly – from $6.6 to $8.9 per barrel. A countervailing development amid a volatile market environment that increasingly oscillates between political impulses and structural demand concerns.
