Shell Adjusts Q4 2025 Forecast, Flags Chemical Losses

Shell PLC (NYSE:SHEL) provided an updated outlook for its fourth-quarter 2025 performance on Wednesday, adjusting expectations for various operational segments in anticipation of detailed results scheduled for February 5, 2026.

Production and Trading Adjustments

In its Integrated Gas segment, Shell has revised its production guidance to approximately 930,000 to 970,000 boe/d, a slight tightening from the previous forecast of 920,000 to 980,000 boe/d. The company anticipates that Trading & Optimisation will remain consistent with third-quarter results for fiscal 2025. Additionally, Shell has lowered its forecast for LNG liquefaction volumes, now estimating 7.5 to 7.9 million metric tons, down from a previous range of 7.4 to 8.0 million metric tons.

The Upstream segment’s outlook also saw adjustments, with production now expected to fall between 1.84 and 1.94 million boe/d, compared to the earlier range of 1.77 to 1.97 million boe/d.

Refining and Chemical Challenges

In the refining and chemical sectors, Shell forecasts an increase in refinery utilization to around 93% to 97%, a significant rise from the prior estimate of 87% to 95%. The refining margin is projected at $14 per barrel, an improvement from $11.6 per barrel in the third quarter. Conversely, the company expects chemical plant utilization to reach 75% to 79%, a revision from the earlier guidance of 71% to 79%.

Notably, adjusted earnings in the Chemicals & Products segment are anticipated to fall below break-even in the fourth quarter, primarily due to a substantial decline in contributions from Trading & Optimisation. Shell now estimates marketing sales volumes at approximately 2.65 to 2.75 million b/d, adjusted from an earlier forecast of 2.50 to 3.00 million b/d. The company expects marketing adjusted earnings to decrease compared to the fourth quarter of fiscal 2024, influenced by a non-cash deferred tax adjustment linked to a joint venture.

Recent developments include Shell’s finalization of a merger with Equinor ASA to consolidate their U.K. offshore oil and gas operations into a new entity named Adura. Furthermore, Shell’s subsidiary, Shell International Trading Middle East Limited FZE, has entered into a 15-year agreement with the Abu Dhabi National Oil Company (ADNOC).

As of Thursday’s premarket trading, Shell shares experienced a 2.75% decline, trading at $69.56, according to data from Benzinga Pro. This fluctuation reflects investor response to the company’s updated forecasts and market conditions.

Shell’s adjustments highlight the challenges faced in its chemical operations while indicating stable performance in refining and gas production. The upcoming detailed results on February 5 will provide further insights into the company’s strategies and market positioning.