LONDON, May 7 – Shell Plc reported stronger-than-expected first-quarter earnings as higher oil and gas prices boosted trading profits, helping offset production disruptions linked to the conflict in the Middle East.
The London-based energy major posted adjusted net income of $6.92 billion, the results were supported by sharp increases in energy prices and stronger trading activity as the war involving Iran disrupted global supply chains and tightened flows through the Strait of Hormuz, a key route for oil and liquefied natural gas shipments.
Shell said the market volatility created favourable trading conditions, allowing the company to absorb the impact of a roughly 10% decline in oil and gas production caused by disruptions affecting operations in Qatar. Overall production fell about 4% from the previous quarter.
The company warned that second-quarter volumes could weaken further due to continued operational constraints in the region and scheduled maintenance across its portfolio.
Shell also announced a reduction in its quarterly share buyback programme to $3 billion from $3.5 billion, while increasing its dividend by 5%. The company said it remains committed to returning between 40% and 50% of operating cash flow to shareholders.
The earnings release follows Shell’s recent acquisition of ARC Resources Ltd., the largest deal completed under Chief Executive Officer Wael Sawan. The acquisition forms part of a broader strategy to strengthen upstream reserves amid shifting global energy dynamics.
As a result, Shell raised its capital spending guidance for the year to between $24 billion and $26 billion, up from an earlier forecast of $20 billion to $22 billion. Around $4 billion of the revised spending plan is tied directly to the ARC transaction.
Higher refining margins also supported earnings, despite weaker conditions in chemicals markets.
Brent crude prices have surged more than 50% since the conflict began in late February, although prices eased slightly this week on signs of possible diplomatic progress between the United States and Iran.
Shell was the last of the major global oil companies to report quarterly results, following stronger trading-driven earnings from rivals including BP Plc and TotalEnergies SE.
