Shell is set to report fourth-quarter and full-year results showing a likely decline in headline earnings driven by a nearly 19% drop in Brent crude over 2025. Full-year headline earnings are expected to fall by around one-fifth compared with the prior year, while fourth-quarter earnings are projected to decrease by approximately 10% year-on-year. In its January trading update, Shell flagged lower downstream profits, a significant loss in chemicals and a substantially weaker performance in energy trading versus the third quarter, offset only by modest upstream and LNG volume gains.

Despite commodity headwinds, Shell’s upstream division continues to deliver marginal growth. Production in the fourth quarter is guided at between 1.84 and 1.94 million barrels of oil equivalent per day, up from 1.832 million barrels in the third quarter. Liquefied natural gas volumes are also expected to tick higher. These improvements underscore operational efficiencies implemented under CEO Wael Sawan, whose tenure has seen Shell beat consensus earnings estimates in five of the last eight quarters.

Investors will scrutinize Shell’s ability to sustain buybacks after announcing plans for a $3.5 billion share repurchase this quarter—the 16th consecutive quarter with buybacks of at least $3 billion. Only Exxon Mobil among major peers has maintained buyback levels despite falling crude prices. Shell’s cost reduction targets, raised last year to a cumulative $5–7 billion by 2028, alongside a reduced capital expenditure envelope of $20–22 billion annually through 2028, will be key to funding future returns without compromising the balance sheet.

Under Sawan’s strategy, Shell has moved to divest higher-cost assets and redeploy capital into lower-cost and high-growth projects. Reuters reports potential sale of Argentina’s Vaca Muerta shale assets could realise several billion dollars. Meanwhile, Shell is advancing multi-billion-dollar deepwater and gas developments in Nigeria, including a $5 billion final investment in Bonga North and $2 billion in the HI gas field, with plans for a potential $20 billion Bonga Southwest project. These transactions reflect Shell’s pivot towards projects with competitive breakevens and strong long-term returns.