Shell Reports Record Q3 Refining Margins as Iran War Drives Brent Above $102 and IEA Convenes Emergency Meeting

Shell issued a third-quarter trading update on October 7, flagging record refining margins of $42 a barrel, up sharply from $24 a barrel in the second quarter, as the ongoing Iran conflict upended global fuel markets. The company also raised its gas production forecast for the quarter and said it expects strong results from energy trading, fueled by the large price swings the war has generated, though it flagged a $300 million write-off and an increase in net debt.

Brent crude climbed back above $100 a barrel and touched a session high above $102, rising nearly 1 percent on the day, as Iran intensified attacks on tankers in the Strait of Hormuz and Houthi strikes on Saudi infrastructure added further supply anxiety. The USO oil ETF traded at $144.91, up 110 percent year-to-date. Iran's Islamic Revolutionary Guard Corps publicly warned that "illegal routes" through the Strait of Hormuz would soon be blocked, an acknowledgment that some oil flows had resumed through workaround channels. A senior Iranian official separately confirmed no nuclear negotiations with the United States have taken place and declared US recognition of Iran's right to uranium enrichment a red line, keeping a diplomatic off-ramp firmly closed.

The IEA's governing board convened an informal emergency meeting on Wednesday at 1300 local time to discuss a coordinated release of oil and diesel stocks, following a G7 commitment the prior week to make 100 million barrels available. EU diplomats signaled that most of those stocks would simply formalize reserves already pledged in March, with Germany planning no new release and France potentially adding 2 million barrels without a firm commitment. Poland's energy minister said Warsaw was ready to release reserves if others followed. The EU energy task force also scheduled a separate call at 1600 CEST to discuss the release plan.

The EIA raised its oil price forecasts for 2026 and 2027, citing rapidly declining global inventories, tight diesel supplies, and persistent risks to Middle East oil flows. Diesel futures jumped 16 cents on the day, with the fuel under additional pressure as harvest season raised agricultural demand, truck movements at UAE ports surged from around 100 a day before the war to roughly 7,000 a day as Gulf cargo bypassed the strait by road, and oil product stocks in Fujairah fell 7.8 percent week-on-week to 7.574 million barrels as of October 5. Separately, Iraqi oil revenues rebounded to pre-war levels in September, topping $7 billion, as high global prices offset steep war-risk discounts. Treasury Secretary Scott Bessent said he expects better oil supply conditions ahead, while equity markets retreated as rising oil prices weighed on sentiment.