Shell Q4 Profit Drops 11% but Maintains Big Share Buybacks

London: Oil giant Shell (SHEL.L) reported a fourth-quarter net profit of $3.3 billion, falling 11% from last year and missing analysts’ estimates of $3.5 billion. This marks the company’s lowest profit since early 2021, driven by weaker oil prices and a downturn in its chemicals division.

Shell’s integrated gas and marketing divisions underperformed, while its chemicals and products unit posted a larger-than-expected loss due to weak oil trading and a broad chemical market slump.

Despite lower profits, Shell continued its major shareholder payouts. The company completed about $14 billion in share buybacks in 2025, part of a $60 billion program over the last four years. Along with $2.1 billion in dividends, total shareholder payouts reached 52% of operating cash flow, above its 40-50% target. The quarterly dividend was raised by 4% to $0.372 per share.

Shell reported fourth-quarter operating cash flow of $9.44 billion, exceeding the expected $7.87 billion but down from $13.16 billion a year earlier. The company is betting on growing demand for liquefied natural gas (LNG) as a key growth area.

Analysts from RBC highlighted that Shell’s reserve life fell to 7.8 years from 8.9 years in 2024. They noted this could raise questions about the company’s M&A and reserve replacement strategy.

Brent crude averaged $63 per barrel in the quarter, down from $74 a year ago. Dutch front-month gas prices at the TTF hub averaged 30 euros per megawatt-hour, compared with 43.3 euros last year.

Shell continues to invest in shareholder returns despite market challenges and lower oil prices, signaling confidence in its long-term strategy.