BP and Shell anticipate strong quarters driven by rising refining margins

Major oil companies BP and Shell are anticipating strong third-quarter performance driven by significant increases in refining margins, despite fluctuating crude oil prices and challenges in other sectors.

BP expects a sharp reduction in net debt, falling to between $13.5 billion and $14.5 billion by the end of September, down from $22.3 billion in the previous quarter. This decrease is largely attributed to asset sales. However, the company expects to take up to $4.5 billion in impairments, primarily related to its low-carbon and transition businesses as it adjusts its green energy strategy.

Shell reports that its indicative refining margin is expected to rise to $42 per barrel, nearly doubling from $24 in the prior quarter. This surge is expected to bolster its products division, helping to offset approximately $2.5 billion in expected cash outflows for German emissions certificate payments and softer performance in its chemicals segment. These margin increases occur amid high diesel and crude oil prices, which have placed financial pressure on consumers and businesses.