Shell shares traded lower on Monday morning after the energy giant flagged weaker trading across its integrated gas, upstream and chemicals businesses.

The group told investors that second quarter trading and optimisation within its integrated gas division is expected to be 'significantly lower' than in the first three months of the year.

Shell also expects to post 'significantly lower' trading and optimisation performance within its chemicals and products division, with unplanned maintenance at its Monaca, Pennsylvania plant contributing to a forecast loss for the quarter.

It is set to post weaker production figures for its upstream division, reflecting scheduled maintenance and the completed sale of its SPDC unit in Nigeria.

However, adjusted earnings within its marketing division are expected to be higher.

Shell shares fell 3.1 per cent to 2,546p in early trading, limiting 2025 gains to 1.2 per cent. 

Weighing further on shares, oil prices traded lower on Tuesday as the OPEC+ group hiked output more than expected in August, and uncertainty over US tariffs continues to weigh on demand forecasts.

Brent crude is currently trading at $67.76 per barrel, reflecting a sharp fall from its peak in the wake of the '12 day war' between Israel and Iran when prices neared $80/bl.

Shell's latest update comes amid rumours the group could launch a takeover attempt for FTSE 100 rival BP, which has seen its shares fall by more than a fifth over the last year.

The UK Government would reportedly be prepared to approve a takeover of BP by its larger rival rather than allow it to fall into overseas hands.

Shell chief executive Wael Sawan publicly has made it clear that his target is to keep returning funds to shareholders through dividends and buybacks, which have been running at £3 billion a quarter.

A takeover of BP is seen at Anglo-Dutch Shell headquarters as a distraction from its core mission.

Nevertheless, the company felt it necessary to take informal soundings with Ministers and officials, should the opportunity to become involved with BP arise.

Shell's last major UK takeover came when it bought BG Group, once the exploration arm of British Gas, for £46 billion a decade ago.