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Shell said on Thursday surging demand for oil products that had almost tripled refining profits in the second quarter would boost earnings by up to $1.2 billion.

In an update before second quarter results on July 28, Shell also said it would reverse up to $4.5 billion in writedowns on oil and gas assets after it raised its energy prices outlook following Russia’s invasion of Ukraine.

Earnings from oil and refined products trading were expected to be strong in the quarter but lower than the first quarter of 2022, Shell said.

Shell’s indicative refining margin rose in the second quarter to $28.04 per barrel from $10.23 in the first quarter and $4.17 a year earlier, driven by a recovery in demand after the pandemic, limited global refining capacity and lower fuel exports from Russia to Western economies.

The increased refining margin is expected to boost the division’s earnings by $800 million to $1.2 billion in the second quarter compared with the first quarter.

Shell shares were up 2.7% at 1040 GMT, lower than the 3.3% gains to the broader energy index.

Shell, which posted a record quarterly profit of more than $9 billion in the first quarter, said its cash flow in the second quarter was hit by an outflow of about $6 billion. It said current market volatility would hit cash flows.

“We see the statement as neutral given a number of offsetting impacts to results, with the main uncertainty being around the magnitude of working capital outflows,” RBC Capital Markets analyst Biraj Borkhataria said in a note.

Oil and gas prices remained elevated in the quarter, with benchmark Brent crude averaging about $114 a barrel.

Shell increased its assumed price for Brent to $80 a barrel in 2023, up from $60 in its 2021 annual report. For 2024 and 2025, the Brent price was rose to $70 a barrel compared with $60. The long-term price was $65, compared with $63.

The upgrade will result in post-tax impairment reversals of $3.5 billion to $4.5 billion. Shell wrote down more than $22 billion in 2020 when the pandemic led to an oil price collapse.

Shell said it completed its $8.5 billion share buyback program during the second quarter.

Shell’s oil and gas production, expected to reach as much as 2.93 million barrels of oil equivalent per day, would be its lowest in at least seven years because of maintenance issues.

Shell, the world’s largest trader of liquefied natural gas (LNG), said its quarterly LNG production was expected to be in a range of 7.4 million to 8 million tonnes.

The figure reflects the removal of LNG volumes from the Sakhalin-2 plant in eastern Russia which Shell plans to exit.

Shell’s larger rival Exxon Mobil signaled last week that skyrocketing margins from fuel and crude sales could generate a record quarterly profit.

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