LONDON, May 9, 2026, 14:06 BST
Shell Plc has started buying back stock under a new $3 billion programme, disclosing on Friday that it bought 1.23 million shares for cancellation after a first-quarter profit beat gave investors a higher dividend but a smaller buyback than last quarter.
The move matters because Shell is trying to keep cash returns high while debt, working capital and Middle East supply disruption are all moving against it. The company reported adjusted earnings of $6.92 billion, above a company-provided analyst consensus of $6.36 billion; adjusted earnings are Shell’s preferred profit measure, stripped of some inventory and one-off accounting effects.
It also lands while the oil shock is still showing up in physical markets. China’s crude imports fell 20% in April to 38.5 million metric tons, the lowest since July 2022, as the closure of the Strait of Hormuz choked supplies to the world’s largest oil importer, Reuters reported on Saturday.
Shell raised its quarterly dividend to $0.3906 a share, up 5% from the prior quarter, but cut its buyback to $3 billion from the $3.5 billion programme completed after fourth-quarter results. A buyback reduces the number of shares in issue; Shell said all shares repurchased under the new programme will be cancelled.
Chief Financial Officer Sinead Gorman told investors Shell had delivered a strong quarter in “heightened volatility” and described the new mix of dividends and repurchases as a rebalancing of shareholder distributions. She said the plan stayed within Shell’s policy of returning 40% to 50% of cash flow from operations through the cycle. Shell
The earnings were not clean. Shell’s chemicals and products unit, which includes refining and oil trading, posted $1.93 billion of profit, up from $450 million a year earlier, while oil and gas production available for sale fell to 2.75 million barrels of oil equivalent a day from 2.86 million in the fourth quarter.
Cash flow from operating activities was $6.1 billion after an $11.2 billion working-capital outflow — cash tied up in inventories, receivables and payables. Net debt rose to $52.6 billion and gearing, a debt-to-capital ratio, climbed to 23.2% from 20.7% at the end of 2025.
Citi analyst Alastair Syme said the year-on-year cut in payouts from the dividend-buyback rebalance should have come earlier, Reuters reported. Gorman said future buyback increases were still possible because Shell shares remained undervalued, the report said.
The competitive read-through is clear enough: European majors with large trading desks have had a better hand in volatile crude and fuel markets. BP reported a $3.2 billion first-quarter profit after the Iran war boosted oil trading, while TotalEnergies raised its dividend and doubled buybacks after a 29% earnings rise.
But Shell’s risk is not a footnote. The company expects second-quarter integrated gas production of 580,000 to 640,000 barrels of oil equivalent a day, with the outlook reflecting the Middle East conflict, including Qatar, and higher planned maintenance; liquefied natural gas, or LNG, volumes are expected at 6.8 million to 7.4 million tonnes.
The Qatar issue may last. Gorman said Pearl GTL Train Two was damaged, nobody was hurt, and Shell currently expects it to take about a year to return that train to service, with repair costs well below $500 million on current estimates.
Shell is also threading the buyback through its planned acquisition of ARC Resources, the Canadian Montney basin producer. The company said the programme must pause from publication of the ARC shareholder circular until the ARC shareholder meeting ends, with any missed repurchases folded into remaining 2026 programmes if approved by the board.
For now, Shell is telling investors the cash-return story still holds: more dividend, fewer shares, and a trading arm that did well in a dislocated market. The harder question is whether that story looks as firm if oil prices ease, working capital does not reverse quickly, or Qatar volumes stay constrained longer than planned.
