Shell refining margins rise 75% as fuel supplies tighten

Shell said its refining margins rose 75 percent in the third quarter as disruptions linked to the Middle East and Ukraine wars tightened supplies of refined fuels.

The British energy company said Wednesday that margins reached $42 per barrel in the July-September period, up from $24 per barrel between April and June. The figures were released in a trading statement before Shell's full third-quarter earnings.

Bloomberg said the $42 level was above the previous record set in 2022 after Russia's invasion of Ukraine.

Refining margins measure the spread between the price of crude oil and the fuels made from it. Shell and other oil majors are seeing "an unprecedented widening of the refining spread", said Kathleen Brooks, research director at trading group XTB.

Fuel prices at the pump have risen in recent months, especially for diesel. The source said production and export of refined products in the Middle East remain disrupted even as crude volumes from the region have recently risen.

Ukrainian drone strikes on Russian energy infrastructure have prompted Russia to ban exports of some products, including gasoline and diesel. Refineries not affected by the conflicts are benefiting from tighter global supplies of refined products.

Brooks forecast that refining margins could move higher if Middle East oil flows are disrupted again, if there are more attacks on refineries or if more refineries shut down.

Shell shares were up 0.6 percent in London midday trading, while the FTSE 100 index was down 0.6 percent.