LONDON – Energy giant Shell Plc has warned investors that its second-quarter profit will decline, citing weakened performance in its oil and gas trading business. In a statement released today, the company said its trading and optimization segments are expected to contribute less to earnings compared to the previous quarter.
Shell’s trading division, while typically one of its most lucrative and opaque operations, will provide lower returns this quarter, overshadowing gains in refining and chemicals margins. Despite improved margins, these units are still anticipated to report losses. Full second-quarter results are due to be released at the end of July.
Trading Weakness Overshadows Refining Margins
The decline in trading performance comes amid broader market volatility. Oil prices, which had spiked in June following tensions between Israel and Iran, later dropped below $70 per barrel as geopolitical tensions eased. Earlier in the year, prices had fallen to four-year lows as a result of increased supply from OPEC+ and escalating global trade conflicts under U.S. President Donald Trump.
CEO Sawan Focuses on Efficiency and Portfolio Optimization
Shell CEO Wael Sawan, who has aimed to close the performance gap with U.S. rivals, continues to pursue a strategy centered on cost reduction, asset divestment, and reliability enhancement. While this approach has helped Shell’s stock outperform competitors in 2025, it has also raised questions about the company’s long-term oil production prospects.
Shell’s output declined by approximately 100,000 barrels per day compared to the first quarter, mainly due to the sale of onshore operations in Nigeria and scheduled maintenance activities. In May, the company had told investors that its production volumes were in line with expectations.
LNG Outlook Remains Strong
Despite near-term pressures, Shell remains bullish on the liquefied natural gas (LNG) market. As the world’s largest LNG producer, Shell expects global LNG demand to rise by 60% by 2040. The company recently commenced exports from its LNG project in Canada, which marks the beginning of several new projects slated to come online over the coming years. LNG volumes in Q2 were flat compared to Q1.
No Plans to Bid for BP
Shell’s trading update comes less than two weeks after the company announced it has no intention of making a bid for rival BP, ending months of speculation in financial markets.
Despite short-term headwinds, Shell continues to position itself for long-term growth in LNG and energy transition markets, while reassessing its traditional oil and gas portfolio under challenging market dynamics.
Source: Bloomberght/ Prepared by: İlayda Gök