Shell reported first-quarter adjusted earnings of $6.92 billion on Thursday, handily beating analyst expectations as the war between the United States and Iran sent oil and gas prices sharply higher and powered the company’s trading division to exceptional results.
The figure exceeded the $6.36 billion average analyst estimate in a company-provided poll and marked a substantial rebound from the $5.58 billion posted in the same quarter a year earlier, according to Reuters. Revenue came in at $69.69 billion for the quarter.
War-Driven Trading Windfall
The results reflect how the Iran conflict, which began in late February, upended global energy markets during the quarter. Brent crude surged more than 55% from around $72 per barrel before the war to peaks above $120, driven by disruptions to shipping through the Strait of Hormuz, a chokepoint for roughly 20% of global oil and gas shipments.
Shell had flagged in an April trading update that its oil trading and marketing earnings would be “significantly higher” than the prior quarter, with refining margins also strengthening to $17 per barrel from $14. The extreme price volatility created ideal conditions for Shell’s trading desks, though it came with a steep cost: the company warned of a $10 to $15 billion working capital outflow from inventory and receivable valuation swings.
Buybacks and Shareholder Returns
Shell’s previous $3.5 billion share buyback program, which ran from February through May 1, concluded ahead of the results. The company had maintained that pace for 17 consecutive quarters at $3 billion or above. Shell also declared a first-quarter interim dividend of $0.3906 per ordinary share, payable on June 29.
The strong earnings arrive as the company prepares for a contested annual general meeting on May 19, where shareholders will vote on a climate resolution opposed by management. Fossil Free London, which has staged repeated protests against Shell and other oil companies over their profits from the conflict, has called for demonstrations at the AGM.
Geopolitical Backdrop
The results landed on a day of cautious optimism in energy markets. Reports earlier this week suggested the United States and Iran may be nearing an agreement to end hostilities, sending oil prices lower and global stocks higher. Brent crude dropped below $100 per barrel on the peace deal hopes before partially recovering. The war’s ultimate resolution remains uncertain, with President Trump maintaining a naval blockade of Iranian ports.
