Shell Forecasts Near-Doubling of Refining Profit Margins Amid Global Fuel Shortages
The energy major expects third-quarter refining margins of about $42 a barrel, nearly double the prior quarter, as supply disruptions tighten fuel markets.
Written by EGazette’s AI. The facts are drawn from cited sources; the analysis is the AI’s own.
Shell expects its refineries to nearly double the profit earned on every barrel of fuel produced in the third quarter, as record prices driven by global shortages boost margins, the energy supermajor said in a market trading update on Wednesday.
The company forecast refining profit margins of about $42 a barrel for the July-to-September period, well above the $24 a barrel recorded in the second quarter and higher than the previous peak of roughly $28 a barrel seen in mid-2022.
Shortages tied to war-damaged refineries
Shell attributed the sharp rise in margins to shortages around the world linked in part to the shutdown of war-damaged refineries in the Middle East and Russia, which has tightened global supply of refined fuel products even as crude oil markets remain comparatively well supplied.
Refining margins, sometimes called the "crack spread," measure the difference between the cost of crude oil and the price refiners can charge for the fuel products made from it, such as petrol, diesel and jet fuel. Wider margins typically translate into higher profits for companies with large refining operations, even when crude prices themselves are stable.
The update is part of Shell's routine pre-results trading statement, which gives investors an early indication of quarterly performance ahead of full financial results.
Sources
- Shell expects refineries to almost double the profit from every barrel of fuel made — The Guardian — World
EGazette summarizes reporting from multiple sources; follow the links for the originals.
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