Shell NYSE:SHEL signaled a mixed but resilient Q2 update as stronger refining margins and gas trading helped offset pressure from lower Middle East-linked volumes.
The company guided Integrated Gas production at 610 to 650 kboe/d, down from 909 kboe/d in Q1, reflecting the impact of the Middle East conflict on Qatari volumes. LNG liquefaction volumes are expected at 7.4 million to 7.8 million tonnes, while Shell said Integrated Gas trading and optimization earnings should be significantly higher than the prior quarter.
Upstream output is expected to hold steadier at 1.75 million to 1.85 million boe/d, compared with 1.84 million boe/d in Q1. Downstream looked stronger, with indicative refining margins rising to about $20/bbl from $17/bbl, chemicals margins jumping to $240/tonne from $139/tonne and refinery utilization near 100%.
the update suggests Shell's trading arm and downstream strength are cushioning geopolitical disruption in gas. The next catalyst is Shell's full Q2 financial release on July 30.