Why Shell Shares Have Jumped on Tuesday

Shares in Shell plc (LON: SHEL) rose on Tuesday after the energy major issued a second-quarter 2026 update note flagging stronger-than-expected refining margins, robust gas trading and improved cash flow, even as Middle East tensions continue to disrupt Qatari gas output.

Shell stock climbed as much as 2.6% to around 2,989p in London trading, up from Monday’s close of 2,912.5p, as investors welcomed signs that the group’s downstream and trading businesses are offsetting geopolitical headwinds upstream.

Refining and Chemicals Margins Jump

The update, released ahead of full results on July 30, showed the company’s Chemicals and Products division benefiting from a sharp rise in margins: indicative refining margins are expected to jump to around $20 per barrel, up from $17/bbl in the first quarter, while indicative chemicals margins are forecast to roughly triple to about $240 per tonne, from $139/tonne previously. Refinery utilisation is also expected to hit close to 100%.

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Gas Trading Offsets Qatar Disruption

Shell’s Integrated Gas division highlighted that Trading & Optimisation results are expected to be “significantly higher” than in the first quarter, helping cushion the blow from lower Qatari LNG volumes. The company cut its Q2 gas production guidance to 610,000-650,000 barrels of oil equivalent per day, down from 909,000 in Q1, directly citing the impact of the ongoing Middle East conflict on operations in Qatar.

Working Capital Swings Positive

Elsewhere, working capital movements are expected to swing to a positive $1-6 billion range, a marked improvement from the $11.2 billion outflow in Q1, reflecting recent volatility in commodity prices. Upstream production guidance was broadly maintained at 1.75-1.85 million boe/d.

Analysts said the combination of stronger margins and trading gains appears sufficient to offset the Qatar-related production hit, supporting sentiment ahead of full results and consensus estimates due July 22.