The situation
Real talk: Shell is absolutely printing money right now. The energy giant just dropped a market update revealing they expect to pull in $42 per barrel in refining profits for the third quarter. That is a massive jump from the $24 per barrel they saw in the second quarter and is blowing their previous 2022 records out of the water.
How we got here
It’s giving supply chain chaos. Basically, a bunch of refineries in the Middle East and Russia are currently offline due to war damage. With those key spots out of the game, there’s a global squeeze on refined fuels like diesel. Even though the price of raw crude oil has actually dipped, the price of the finished fuel at the pump is soaring.
The players
Europe’s biggest oil and gas company is leaning hard into this. TotalEnergies CEO Patrick Pouyanné essentially called it out at a London conference this week, noting that refineries that were once considered liabilities are now lowkey massive cash cows. While Shell has seen some production hits due to the crisis in Iran, their gas production is actually trending upward, expected to land between 740,000 and 780,000 barrels per day.
Why it matters
It’s a classic case of supply and demand working in the favor of big oil. As long as those regional conflicts continue to keep global refinery capacity low, these companies are set to keep stacking record-high profits while the rest of us deal with the price tags. The plot thickens for energy markets as they navigate these record-breaking margins.
