LONDON, Feb 5, 2026, 08:31 (GMT)
- Adjusted earnings for Q4 dropped to $3.26 billion, below the expected $3.5 billion
- Dividend increased by 4% to $0.372 per share; Shell kicked off a new $3.5 billion buyback program
- Net debt rose to $45.7 billion, lifting gearing to 20.7%
Shell announced on Thursday a new $3.5 billion share buyback and raised its dividend, despite a drop in profit that missed expectations in the final quarter of 2025.
This shift is significant since investors long viewed buybacks as the oil sector’s go-to way to deploy cash, despite sliding crude prices and shrinking earnings. Now, the key issue is how long Shell can maintain steady returns without its leverage inching higher.
Net debt hit $45.7 billion at the end of December, pushing gearing — the debt-to-capital ratio — up to 20.7% from 18.8% in the prior quarter, according to the company’s results statement. 1
Shell’s adjusted earnings, its preferred profit metric excluding one-off items and certain accounting effects, dropped 40% from the previous quarter to $3.26 billion. Operating cash flow reached $9.4 billion.
Adjusted earnings for the full year fell 22% to $18.53 billion. Shell’s chemicals and products segment recorded an adjusted loss of $66 million this quarter, whereas integrated gas and upstream segments posted adjusted earnings of $1.66 billion and $1.57 billion, respectively.
Oil prices took a hit, with Brent tumbling nearly 20% in 2025 and falling below $60 a barrel by year’s end. The drop was sparked by talks of a Russia-Ukraine peace deal, which could mean more Russian oil flooding the market. 2
Shell boosted its quarterly dividend by 4% to $0.372 per share, confirming the latest buyback should wrap up before its first-quarter earnings report. CEO Wael Sawan noted that “cash delivery remained solid” even amid a “softer macro” environment, marking the 17th consecutive quarter with buybacks of at least $3 billion. 3
The debt increase was linked to the payout surge. Shell reported $4.2 billion in free cash flow for the quarter, but spent $3.4 billion on buybacks and $2.1 billion on dividends, plus lease additions and interest expenses.
Norway’s Equinor announced on Wednesday it plans to slash share buybacks by 70% in 2026, bringing them down to $1.5 billion amid weakening oil and gas prices. Yet, the company still boosted its dividend. 4
Analysts had been looking for roughly $3.5 billion in Shell’s quarterly adjusted earnings, according to a company poll cited by Reuters. LSEG data reveals Brent crude averaged about $63 a barrel during the quarter, down from roughly $74 a year earlier. The Dutch TTF gas benchmark came in at around 30 euros per megawatt-hour. 5
The outlook worsens if crude sticks close to $60 and chemicals continue to underperform. A prolonged price slump might push companies into difficult decisions: scaling back buybacks, taking on more debt, or tightening spending further.
Shell flagged $26.1 billion in free cash flow for 2025 alongside steady capital expenditure, aiming to reassure investors. The immediate challenge: will the buyback continue smoothly into Q1, and can net debt be held in check?
