Shares in oil and gas behemoth Shell took a hit in early trading on Thursday, 8 January 2026, after the company warned of a weaker performance in two key areas of its business.
Trading and Chemicals Divisions Underperform
The FTSE 100-listed firm revealed that results from its pivotal energy trading arm are set to be significantly lower than in the previous quarter. This decline coincides with a broader slump in crude oil prices, with the Brent crude benchmark having fallen by 18% over the past year.
Simultaneously, Shell pointed towards a loss in its chemicals and products division. The company stated that adjusted earnings for this troubled segment are not expected to break even for the final quarter of 2025. The division's struggles were attributed to weaker chemical margins, which slid to $140 per metric ton from $160 in the third quarter, alongside an impact from a tax adjustment.
Market Reaction and External Pressures
The dual warning prompted an immediate market reaction, with Shell's shares dropping 2.7% in early trading. The company now faces an uncertain backdrop, not only from volatile commodity prices but also from geopolitical tensions.
Analysts highlighted concerns that political instability in Venezuela, and potential US involvement, could exacerbate market volatility by potentially unlocking the country's vast oil reserves.
Leadership in the Spotlight for 2026
Russ Mould, investment director at AJ Bell, commented on the challenges. "The weak showing for the oil trading business reflects lower crude prices," he said, noting the Venezuela factor. "The weak margins and big loss flagged for Shell’s chemicals division hint at more entrenched problems which the market will want to see fixed."
Mould also turned the focus onto Shell's leadership, suggesting that CEO Wael Sawan may face increased scrutiny in 2026. "Having opted not to pursue an ambitious takeover of BP last year, Sawan may be under the spotlight... as pressure builds on him to demonstrate where Shell’s next phase of growth is coming from," he added.
Investors and analysts will be awaiting the company's full-year results for 2025, which are scheduled to be unveiled in an update early next month.
