LONDON, May 9, 2026, 14:06 BST
Shell Plc kicked off its fresh $3 billion buyback program, revealing Friday it snapped up 1.23 million shares for cancellation. The move follows a first-quarter profit beat that delivered investors a bigger dividend, though this round of buybacks is smaller than the previous quarter’s.
It’s significant for Shell, which is under pressure to sustain strong cash returns as it faces rising debt, tighter working capital, and Middle East supply issues pulling in the other direction. Adjusted earnings came in at $6.92 billion, topping the $6.36 billion consensus Shell gathered from analysts. That metric—Shell’s chosen profit gauge—excludes certain inventory swings and isolated accounting items.
The oil shock hasn’t faded from the physical markets either. In April, China’s crude imports slumped 20% to 38.5 million metric tons—marking the lowest tally since July 2022—as supply through the Strait of Hormuz dried up, tightening flows to the world’s top oil buyer, according to Reuters on Saturday.
Shell bumped up its quarterly dividend by 5% to $0.3906 a share, but trimmed its buyback allocation to $3 billion, down from the $3.5 billion program it wrapped up after fourth-quarter results. Buybacks shrink the total share count. According to Shell, every share bought back under the new plan will be cancelled.
Shell’s Chief Financial Officer Sinead Gorman told investors the company turned in a strong quarter amid “heightened volatility.” Gorman characterized the updated blend of dividends and buybacks as rebalancing how Shell returns capital to shareholders. She emphasized that the approach still fits with Shell’s policy to return 40% to 50% of operational cash flow across the cycle. Shell
These earnings came with caveats. Shell’s chemicals and products division—think refining, oil trading—generated $1.93 billion in profit, a substantial jump from $450 million a year ago. Oil and gas production available for sale slipped, hitting 2.75 million barrels of oil equivalent per day, down from 2.86 million in the prior quarter.
Shell’s operating cash flow landed at $6.1 billion, weighed down by an $11.2 billion drain from working capital—money absorbed into inventories, receivables, and payables. Net debt grew to $52.6 billion, pushing gearing up to 23.2%, compared to 20.7% at the end of 2025.
According to Reuters, Citi’s Alastair Syme argued Shell should have trimmed its payout mix from dividends and buybacks sooner. Still, Gorman noted that Shell could boost buybacks down the line, telling Reuters the shares are undervalued.
What jumps out: European energy giants with big trading arms have capitalized on the turbulence in crude and fuel. BP posted first-quarter profit at $3.2 billion, lifted by oil trading after the Iran war. TotalEnergies saw earnings climb 29%, leading the company to bump its dividend and double share buybacks.
Shell isn’t brushing off its exposure. The company is forecasting integrated gas production in the second quarter to land between 580,000 and 640,000 barrels of oil equivalent per day, citing the Middle East conflict—Qatar included—and a ramp-up in scheduled maintenance. LNG output is pegged at 6.8 million to 7.4 million tonnes.
The Qatar situation could drag on. Gorman noted that Pearl GTL Train Two sustained damage—no injuries reported. Shell now figures it’ll need roughly a year to get that train up and running again, with repairs projected to cost under $500 million at this stage.
Shell is tying its buyback plan to the acquisition of ARC Resources, a Montney basin firm in Canada. The company stated it will halt the programme from the release of the ARC shareholder circular up until the ARC shareholder meeting wraps. Any repurchases skipped in that window would be pushed into the remaining 2026 buybacks, subject to board approval.
Shell is sticking to its message for investors: higher dividends, fewer shares, and a trading business that capitalized on a choppy market. But there’s a tougher issue lurking—how solid does this look if oil prices drop, working capital doesn’t bounce back soon, or Qatar’s output stays tight beyond expectations?
