The oil majors are heading for a big jump in third-quarter profit, Reuters reports. Refining and trading have boomed since the US-Israeli war on Iran disrupted the Strait of Hormuz. So the question for investors is how the majors spend that cash, not whether oil majors Q3 profits rise.
Refining drives oil majors Q3 profits
Shell, BP and TotalEnergies all expect refining margins three to four times higher than a year ago. In fact, Shell guides for a record margin of $42 a barrel. TotalEnergies expects cash flow from refining and chemicals to double to around $4bn from the second quarter. Meanwhile, Exxon says higher margins could add $4.5bn to downstream profit.
Buybacks or debt?
So far, Chevron and Exxon have used the windfall to pay down debt. HSBC expects Shell to announce a $3.5bn buyback for the fourth quarter, up from $3bn a quarter.
BP, by contrast, is repairing its balance sheet. Broker TPH says its underlying profit could top $7bn, against $5.7bn in the second quarter. Citi expects BP’s net debt to fall to 0.8 times operating cash flow, from 1.7 times at the end of 2025. Even so, HSBC sees no BP buyback before 2028.
What to watch
Shell and TotalEnergies report on 29 October. BP, Chevron and Exxon follow on 30 October. In addition, BP holds a strategy update on 15 December.
For the price backdrop, read our analysis of Brent at $110.
