Shell's adjusted earnings rose to $10.8 billion, ahead of forecasts, and it will buy back $5 billion of stock in the next three months. TotalEnergies earned $9.1 billion and kept its gearing below 10%. Shell shares hit a 52-week high.
Shell and TotalEnergies reported large third-quarter profits on Thursday morning and promised to hand much of the cash back. They did it on a morning when oil was moving the other way.
Shell reported third-quarter adjusted earnings of $10.81 billion, up from $9.84 billion in the second quarter and ahead of the roughly $10.3 billion analysts expected. Income attributable to shareholders was $12.1 billion and cash flow from operations $21.0 billion. The company will buy back $5 billion of shares over the next three months.
TotalEnergies reported adjusted net income of $9.1 billion and cash flow of $12.3 billion. Its gearing, a measure of net debt against equity, stayed below 10%. It set an interim dividend of 0.90 euro a share and plans $2.5 billion of buybacks in each of the fourth quarter and the first quarter of 2027.
The reaction
Shell shares rose about 3.3% in early London trading to a 52-week high. TotalEnergies rose about 1% in Paris.
The timing problem
The results reflect high oil prices during the conflict in the Middle East. On Thursday morning, Brent was near $114 and West Texas Intermediate near $101.60, both down about 1%, after reports that Vice President JD Vance had written to Iranian officials about restarting talks. At the same time, regional allies were reportedly warned to prepare for possible U.S. strikes after next week's midterms.
For the oil majors, that leaves earnings tied to a price that can move sharply on a single headline. Both companies are returning cash at a pace set by current prices, and both have kept their balance sheets strong, which gives them room if prices fall.
Why buybacks rather than growth
Shell's $5 billion buyback over three months and TotalEnergies' $2.5 billion a quarter show that a large share of the windfall is going back to shareholders. That may suggest management sees the high prices as temporary and prefers to lock in returns while they last.
Windfall or new baseline?
The windfall case: these earnings depend on a conflict premium in oil that diplomacy could erase, and investors should treat the buybacks as a one-time distribution.
The baseline case: strategic reserves that cushioned the market are being exhausted, Russian refinery runs are only now recovering, and Gulf supply remains at risk, so high cash returns may last longer than the market assumes.
What to watch
Brent's reaction to any Iranian reply to the Vance letter, refining margins, Exxon Mobil and Chevron results on Friday, and whether either company raises its buyback pace next quarter.