Shell announced that it has narrowed its fourth‑quarter 2025 liquefied natural gas (LNG) output forecast to a range of 7.5 million to 7.9 million metric tonnes, tightening the previous guidance of 7.4 million to 8.0 million tonnes. The adjustment reflects a more conservative outlook for upstream and trading operations and signals a tighter production window for the final quarter of the year.
The tightening is driven by weaker trading performance and a forecasted loss in the chemicals segment. Shell warned that the chemicals business would record a significant loss, falling below break‑even earnings, due to a decline in chemical margins—from $160 per tonne in Q3 to $140 per tonne in Q4—combined with a deferred tax adjustment related to a joint‑venture. Trading results are expected to be significantly lower than the prior quarter, partly because hedging contracts taken in 2022 are expiring, which has compressed margins in the integrated gas segment.
Despite the narrowed LNG guidance, Shell expects the impact on revenue and cash‑flow generation to be short‑term. Upstream production remains stable, and refining margins are projected to rise to $14 per barrel from $12 in the prior quarter, offsetting some of the pressure from trading and chemicals. The company therefore anticipates only a modest decline in LNG revenue and cash‑flow for the remainder of the year.
Market reaction to the update was negative: Shell shares fell 2.0 % in London following the announcement. Analysts highlighted that the weaker trading and chemicals performance could imply a roughly 10 % negative impact on Q4 2025 net‑income consensus, underscoring investor concern over the headwinds in those segments.
The guidance change signals management’s cautious stance amid headwinds in trading and chemicals, while maintaining confidence in LNG production and refining margins. Shell will release its full fourth‑quarter and full‑year 2025 results on February 5, providing a more comprehensive view of the company’s financial performance.
The company’s decision to narrow its LNG output forecast reflects a strategic response to current market conditions, balancing the need for operational discipline with the long‑term outlook for LNG demand. By tightening guidance, Shell aims to manage expectations and demonstrate a proactive approach to navigating the challenges in its trading and chemicals businesses.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.