Shell PLC reported a notable decline in its oil trading segment results for the final quarter of 2025, underscoring ongoing pressure in global energy markets. The shortfall contributes to a broader trend of reduced profitability across the company’s upstream and trading operations.
- Oil trading segment posted a $450 million loss in Q4 2025, compared to a $280 million gain in Q4 2024.
- Adjusted profit declined 18% year-over-year, driven by trading and upstream performance.
- Annual trading revenue forecast for 2026 is $38 billion, down from $45 billion in 2023.
- Shell’s stock fell 2.3% in early January 2026, closing at $78.40.
- Company is divesting non-core assets and shifting toward long-term supply contracts.
- Capital allocation to low-carbon projects remains a strategic priority.
Shell’s oil trading division recorded a loss of $450 million in the fourth quarter of 2025, marking a reversal from a $280 million gain in the same period the previous year. This performance reflects intensified volatility in crude pricing, tighter supply-demand balances, and increased competition in key trading hubs such as Singapore and Rotterdam. The trading segment’s deterioration is a key factor behind the company’s overall adjusted profit decline of 18% year-over-year, despite a 7% increase in crude oil production volume. The results come amid a broader restructuring of Shell’s energy trading portfolio, including the divestiture of non-core trading assets in 2024 and a strategic shift toward long-term supply contracts. The company now expects annual trading revenue to stabilize at around $38 billion in 2026, down from a peak of $45 billion in 2023. The reduced outlook reflects persistent uncertainty in global shipping routes, shifting geopolitical dynamics in the Middle East, and declining margins in refined products trading. Investors reacted cautiously, with Shell’s shares dropping 2.3% in early trading on January 8, 2026. The stock has since recovered slightly, trading at $78.40, but remains below the $85 level seen in mid-2024. Analysts note that while the company continues to generate strong cash flow from its integrated operations, the volatility in trading has become a material drag on earnings consistency. The shift toward lower-risk, asset-light trading models is expected to continue through 2026. The performance highlights a structural challenge for integrated oil majors: balancing short-term trading gains with long-term energy transition strategies. Shell’s management has emphasized that the company will prioritize capital allocation to low-carbon projects, including offshore wind and hydrogen, despite near-term headwinds in traditional energy segments.