Shell PLC reported its fourth-quarter and full-year 2025 financial results. Adjusted profit for the fourth quarter reached $3.26 billion, an 11% decline compared to the same period the previous year. This figure not only fell short of the market consensus estimate of $3.53 billion but also marked the lowest quarterly profit since the first quarter of 2021. The company's earnings were pressured by lower crude oil prices, underperformance in oil trading, and challenges in its chemicals business.
Total revenue for the fourth quarter was $64.093 billion, a slight decrease of approximately 3.3% compared to $66.281 billion in the fourth quarter of 2024. Excluding one-time items, adjusted earnings per share were $0.57, slightly below the $0.60 reported a year earlier and missing the analyst forecast range of $0.69 to $1.29.
For the full year 2025, the company posted an adjusted profit of $18.53 billion, a significant decline of about 22% from the $23.72 billion achieved in 2024.
Despite the clear pullback in profitability, Shell maintained a relatively aggressive approach to shareholder returns. The company announced a 4% increase in its fourth-quarter dividend to $0.372 per share and simultaneously launched a new share buyback program totaling $3.5 billion, which is expected to be completed before the next quarterly results announcement.
Chief Executive Officer Wael Sawan stated that the company has cumulatively reduced costs by $5.1 billion through structural reforms since the end of 2022, achieving its target ahead of schedule. This provides a solid defensive foundation for maintaining robust cash distribution capabilities in a low oil price environment.
At the operational level, Shell's profit structure showed a clear divergence. Integrated Gas and Upstream businesses remained the core profit pillars for the group, demonstrating strong cash generation. In contrast, the Chemicals and Products business reported a loss of $66 million in the fourth quarter.
By the end of 2025, the company's gearing ratio had increased to 20.7%, with net debt expanding to $45.7 billion. Following CEO Wael Sawan's cost-cutting measures and divestment of underperforming assets, investors are increasingly focused on Shell's growth prospects.
Looking ahead to 2026, Shell expects full-year capital expenditure to remain within the range of $20 billion to $22 billion. Actual spending in 2025 was slightly below this range. Under the leadership of Sawan and Chief Financial Officer Sinead Gorman over the past three years, the company has consistently tightened its spending.
In terms of oil and gas production, the company's quarterly output grew by 2% year-over-year, a performance that paled in comparison to its U.S. peers. Chevron Corporation saw a 20% increase in fourth-quarter production, benefiting from output in Kazakhstan and the integration of Hess Corporation assets. Exxon Mobil Corporation expanded production by 15%, driven by output from the Permian Basin and its massive Guyana project.
Brazil and the Gulf of Mexico are key regions for Shell's production, as is its new joint venture with Equinor ASA in the UK North Sea. However, investor enthusiasm for these projects has been lower than for those of Exxon and Chevron. Elsewhere, Shell is seeking commercialization pathways for its oil discovery in Namibia and has re-entered the fossil fuel development sector in Libya.
In 2025, with rising production both inside and outside the OPEC+ alliance leading to widespread expectations of a supply surplus for the year, oil prices plummeted by 18%. So far in 2026, benchmark Brent futures have recovered some ground, trading around $68 per barrel, with geopolitical risk premiums added due to tensions between the US and Iran. However, prices remain well below the highs of over $80 seen in 2025.
It is worth noting that analysts had already lowered their expectations following a trading update issued by Shell in January, which warned that quarterly oil trading performance was "significantly lower" than the previous quarter and that the struggling chemicals division was incurring losses. Even with these lowered expectations, the profit result still fell short.
The severe losses in the chemicals division were substantial enough to offset improved refining margins—a factor that had benefited Exxon Mobil when the Texas-based giant reported its results late last month. The chemicals business continues to drag on earnings, a issue Sawan has committed to addressing while cautioning that it may be a lengthy process.
Meanwhile, strong performances from U.S. competitors have increased pressure on Shell. This year, shares of Exxon Mobil and Chevron have surged due to robust production from low-cost fields in Guyana, the Permian Basin, and Kazakhstan, making Sawan's goal of closing the significant valuation gap with these two companies increasingly difficult. While Shell stock was the top performer among the world's five largest oil majors in dollar terms last year, gains have faded since mid-November, and the stock has lagged behind its peers so far in 2026.