Shell enters its fourth-quarter earnings release at a pivotal moment, with expectations shaped less by raw profit figures and more by confidence in execution. After several years of consistently outperforming forecasts, the energy major now confronts a markedly weaker oil price environment that threatens to test both earnings resilience and capital return ambitions. For markets in Europe, the U.S., and energy-sensitive regions such as Israel, the results will be read as a broader signal on how efficiently oil majors can navigate a lower-price cycle without sacrificing shareholder discipline.

A Management Record That Raises Expectations

Since taking the helm more than three years ago, Wael Sawan has built a reputation for steady operational delivery. Shell has exceeded analyst expectations in five of the past eight quarters, including a standout performance last autumn when profits comfortably beat even the most optimistic forecasts. In a company as heavily scrutinized as Shell, repeated earnings surprises are rarely accidental. They suggest tighter cost controls, sharper portfolio management, and a leadership team adept at extracting value even as market conditions fluctuate.

Earnings Under Pressure from Oil and Chemicals

That track record now faces a more challenging test. Brent crude fell nearly 19% over 2025, at one point dipping below $60 a barrel for the first time in almost five years. Against this backdrop, Shell’s full-year earnings are widely expected to decline by roughly 20%, with fourth-quarter profits seen down about 10% year-on-year. Management has already flagged weaker downstream results, a significant loss in chemicals, and softer energy trading performance. These pressures highlight how sensitive even well-run integrated producers remain to commodity cycles.

Upstream and LNG Offer Stability

Not all signals are negative. Shell’s upstream operations continue to provide a degree of insulation, with production expected to rise modestly compared to the previous quarter. Liquefied natural gas volumes are also set to edge higher, reinforcing Shell’s strategic positioning in global gas markets. For long-term investors, LNG remains a critical pillar, offering structural demand growth and relatively stable margins compared with oil-linked businesses.

Buybacks and Capital Discipline in Focus

The central question for markets is whether Shell can sustain its aggressive capital return program. The company has announced at least $3 billion in share buybacks for 16 consecutive quarters, a level matched among peers only by Exxon Mobil. This consistency has underpinned investor confidence, but a prolonged period of lower oil prices could force difficult trade-offs. Shell’s raised cost-reduction targets and lower capital expenditure guidance suggest management is determined to protect buybacks, yet investors will scrutinize any hint of slippage.

Strategic Shifts and Geographic Priorities

Beyond the numbers, Shell’s capital allocation narrative is evolving. Potential asset sales in higher-cost regions align with Sawan’s effort to streamline the portfolio, while renewed investment enthusiasm in Nigeria marks a notable strategic shift. Multi-billion-dollar offshore projects there underscore Shell’s willingness to commit capital where returns justify the risk, even as it exits less competitive assets elsewhere.

Looking ahead, Shell’s results may matter less for what they reveal about last quarter and more for what they signal about discipline in a tougher cycle. Investors will be watching guidance on costs, buybacks, and portfolio moves closely, aware that credibility built during boom years is often tested when conditions turn less forgiving.