British energy major Shell has reported that its first-quarter earnings will see a “significant” increase, driven by a surge in oil prices during the ongoing Middle East conflict, despite a dip in production levels.
The company’s marketing division—which includes its global network of service stations—is expected to post adjusted earnings “significantly higher” than in the same period last year. This comes even as global crude futures dipped Wednesday following the announcement of a two-week ceasefire between the United States and Iran. Nevertheless, prices remain substantially above levels seen at the start of the conflict on February 28.
Shell also noted that gas production is projected to be lower than at the end of 2024, citing the impact of the Middle East conflict on Qatari output. Ras Laffan, Qatar’s northern LNG hub and the world’s largest liquefied natural gas terminal, has sustained significant damage during the hostilities. Qatar maintains long-term LNG supply agreements with Shell and other international energy firms, including ENI, TotalEnergies, Petronet, and Sinopec.
Despite the production setbacks, Shell’s net profit rose 11 percent last year to nearly $18 billion, as higher sales volumes and cost reductions helped offset falling oil and gas prices.
However, the market reacted negatively to Wednesday’s price retreat, with Shell’s share price dropping 6.4 percent and peer BP falling 7 percent on London’s FTSE 100 index in afternoon trading.
Shell is scheduled to release its full first-quarter results on May 7.
