The Shell share price has attracted attention as the energy giant expects its oil refineries to earn much higher profits in the third quarter of 2026. Rising fuel prices and supply shortages across the global market have created favourable conditions for companies that turn crude oil into products such as petrol and diesel.
Shell expects its refining profit margin to reach $42 per barrel between July and September. This would be a sharp increase from the $24 per barrel reported for the second quarter of the year.
The forecast is also above the previous record of around $28 per barrel, which was reached during the early stages of the Russia-Ukraine war.
However, higher refining margins do not automatically mean that the Shell share price will continue to rise. Investors will also look at the company’s production levels, costs, future earnings and wider energy market conditions.
Why Are Shell’s Refinery Profits Rising?
The main reason behind the expected increase is the growing difference between crude oil prices and the prices of refined fuels.
Crude oil is the raw material used to produce petrol, diesel and other petroleum products. When the prices of these fuels rise faster than the cost of crude oil, refineries can earn more money from every barrel they process.
Supply problems have pushed fuel prices higher in recent months. Damage to refineries in the Middle East and Russia has reduced the amount of fuel available in the market, while demand for essential energy products continues to support prices.
At the same time, some Gulf oil exports have recovered, helping crude oil prices move down from their earlier highs. This combination of lower crude costs and expensive refined fuels has improved the outlook for refinery profits.
Refineries in Europe and the United States could benefit from these conditions.
How Have Oil Prices Affected the Shell Share Price?
Shell’s share price has reached record levels amid changes in the global energy market.
According to the reference report, shares in the company climbed to £36.23 at the end of the previous month. Shell is one of Europe’s largest oil and gas companies and holds a major position in the UK’s FTSE 100 index.
The rise came even as crude oil prices moved lower from their 2026 peak of more than $115 per barrel to around $100.
European natural gas prices and higher diesel prices have helped support the company’s market outlook. The reference report also noted that European gas prices more than doubled compared with the previous year during the summer.
Still, share prices can move for several reasons. Investors may consider expected profits, future energy demand, company spending and wider economic conditions before deciding whether to buy or sell Shell shares.
Diesel Prices Reach New Highs
Diesel has become an important part of the current energy market story.
During the third quarter of 2026, the premium paid for diesel over the global oil benchmark reportedly rose above $100 per barrel for the first time. This highlights the shortage of refined fuels and the strong margins available to refineries.
Brent crude oil averaged $85.60 per barrel in the third quarter, compared with $97.05 in the second quarter. However, the third-quarter average remained above the $68.14 recorded during the same period in 2025.
These figures show that crude oil prices have eased from their earlier highs, but they are still relatively expensive compared with last year.
For Shell, the key question is how long the difference between crude oil and refined fuel prices will remain at such a high level.
Europe’s Refineries Could Benefit From the Energy Crisis
Shell operates several major refineries in Europe, putting it in a position to benefit from higher refining margins.
French energy company TotalEnergies is another major player in the European refining market. Its chief executive, Patrick Pouyanné, recently highlighted the value of operating across different parts of the energy business.
He explained that having both refining and other energy operations can help companies manage changing market conditions. Refineries that may have appeared less profitable in the past can become valuable when fuel supplies tighten.
This integrated business model is important for large energy companies. It allows them to earn money from different parts of the oil and gas supply chain rather than relying on crude oil production alone.
However, the benefits depend on market conditions and the performance of individual operations.
Shell’s Gas Production Faces Challenges
Although refining profits are expected to rise, Shell is also dealing with difficulties in its natural gas business.
The crisis in the Middle East caused severe damage to one of the company’s key gas processing facilities in the Gulf. As a result, its gas production was reduced from a pre-crisis level of around 900,000 barrels of oil equivalent per day by approximately one-third.
The company expects production to recover to between 740,000 and 780,000 barrels of oil equivalent per day in the third quarter of 2026.
That forecast is higher than its earlier estimate of 570,000 to 630,000 barrels per day. Shell produced around 631,000 barrels of oil equivalent per day in the second quarter.
The improved outlook partly reflects Shell’s acquisition of Canadian company ARC Resources, which was completed in early September. The deal is expected to add around 370,000 barrels of oil equivalent per day to Shell’s overall oil and gas production once fully reflected in its figures.
The acquisition is expected to strengthen Shell’s production base, although the timing of the benefits and actual output will matter to investors.
What Could Happen to the Shell Share Price Next?
Shell’s outlook has both positive and negative factors.
Higher refining margins could support earnings if fuel shortages continue and refined product prices remain strong. The company’s wider energy operations and acquisition of ARC Resources may also help its production outlook.
On the other hand, refining profits can fall if fuel supplies improve, crude oil prices rise relative to diesel and petrol, or demand weakens. Continued disruption to gas production could also affect the company’s overall performance.
Investors should therefore look beyond a single quarter’s refining margins when assessing the Shell share price. Future financial results, production updates, energy prices and company guidance will all be important.
Shell’s expected record refining margins offer a positive sign for one part of its business, but they do not guarantee further gains in its shares.
Anyone considering investing should check the latest share price, company announcements and financial information before making a decision.
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