Shell expects its chemicals and products division to swing to a loss in the fourth quarter of 2025, on the back of lower chemicals margin compared to the previous quarter, the UK-based supermajor said in a quarterly trading update on Thursday.
Adjusted earnings at the chemicals and product segment are expected to be below break-even for the fourth quarter, said Shell, which is set to report full quarterly and annual earnings on February 5, 2026.
Trading and optimization in the chemicals division is expected to be significantly lower in the fourth quarter than in the third quarter of 2025, Shell warned.
The indicative chemicals margin for Shell dropped to $140 per ton in Q4, down from $160 a ton in the third quarter of 2025.
“The Chemicals sub-segment adjusted earnings are expected to be a significant loss, reflecting a (non-cash) deferred tax adjustment in a joint venture,” Shell said.
In the integrated gas division, the supermajor expects trading and optimization to be in line with the third quarter result.
Refining, however, could get a boost as the indicative refining margin across Shell’s assets is expected to have been $14 per barrel for the fourth quarter, up from $12 per barrel for the third quarter.
For Q3 2025, Shell posted consensus-beating earnings, as higher oil and LNG production, higher trading profits, and improved refining margins partly offset the decline in oil prices.
Shell reported adjusted earnings of $5.4 billion for the July-September quarter, down from $6 billion for the same quarter last year, but higher than the company-provided consensus estimate of $5.09 billion.
Cash flow generation also beat analysts’ estimates as cash flow from operations (CFFO) hit $12.2 billion, higher than the $11-billion forecast.
CFFO was lower compared to a year ago, as oil prices declined from 2024 levels.
This year, Shell and other supermajors may have to sacrifice some buybacks if oil prices remain at $60 per barrel or lower, analysts say.
By Tsvetana Paraskova for Oilprice.com
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