Shell oil trading profits soar amid Iran war but Qatar strikes hit gas output
Shell expects a sharp rise in trading profits thanks to volatile oil markets triggered by the Iran crisis. The company’s renewable energy division also forecasts higher earnings, but gas production will decline after attacks on its Qatari LNG assets.
Shell has announced that it expects a significant jump in its trading profits for the first quarter of 2026, driven by the sharp rise in oil prices that has followed the recent Iran crisis. The company’s chemicals and products unit, which includes its main oil trading desk, is set to benefit from the market volatility that has created opportunities for traders to capture large gains.
What Happened: A Surge in Trading Profits
Oil prices have climbed from roughly $61 a barrel in January to highs of $119 by the end of March, marking some of the biggest daily swings on record. These price moves were largely caused by disruptions to oil and gas flows through the Strait of Hormuz, a critical chokepoint for global energy supplies. Shell’s trading desk has capitalised on these fluctuations, and the company now projects that its trading profits will be “significantly higher” than in the previous quarter.
Renewable Energy Division Also Gains
In addition to the gains from oil trading, Shell’s renewable energy division is expected to see earnings rise to between $200 million and $700 million in the first quarter, up from about $100 million in the fourth quarter of 2025. This jump reflects a broader shift in the company’s portfolio, as it seeks to diversify revenue streams amid a volatile energy market.
Impact on Gas Production in Qatar
While trading profits are on the rise, Shell warned investors that gas production in the first quarter will be lower than in the previous quarter. The company’s assets in Qatar were hit by a series of strikes launched by Iran in March, targeting key energy infrastructure across the Gulf region. One of the attacks damaged Shell’s facilities at the Ras Laffan liquefied natural gas (LNG) complex, a major source of the company’s gas output.
Shell estimates that its gas production will drop by about 5%, falling to between 880,000 and 920,000 barrels of oil equivalent a day, compared with 948,000 in the fourth quarter. The loss of Qatari production, coupled with the impact of Cyclone Narelle on Shell’s Australian operations, will be partially offset by a ramp‑up in output from its LNG Canada venture.
Broader Market Dynamics and Geopolitical Tensions
Oil prices fell below $100 a barrel after the United States and Iran agreed to a two‑week ceasefire, but remain more than 50% higher than last year. Iran’s government has pledged that the Strait of Hormuz will temporarily reopen during this period to allow oil and fuel tankers into the global market. Shell’s CEO, Wael Sawan, has warned that Europe could face an energy shortage in April unless the strait reopens, citing the ongoing supply crisis that has already forced energy rationing in Asian countries.
Shell is working with governments to address the oil and gas supply crisis, a situation that has already seen energy rationing in South Asia and is spreading to Southeast and Northeast Asia, and potentially Europe as the crisis progresses into April.
What Happens Next?
As the ceasefire holds, markets will continue to monitor the situation in the Strait of Hormuz and the status of Shell’s Qatari assets. The company’s trading desk will likely continue to benefit from price volatility, while its renewable energy division seeks to maintain growth. Investors will watch for any changes in gas production levels and the overall impact of geopolitical tensions on global energy supplies.
Key Takeaways
- Shell’s trading profits are expected to rise sharply due to volatile oil prices.
- The renewable energy division forecasts earnings between $200m and $700m in Q1 2026.
- Gas production in Qatar will decline by about 5% after Iranian strikes.
- Oil prices remain high despite a temporary ceasefire, keeping supply concerns alive.
- Shell is collaborating with governments to mitigate the energy supply crisis.
Why it matters
The story highlights how geopolitical events can simultaneously boost trading profits for energy majors while disrupting production, underscoring the complex dynamics that shape global energy markets.
Key points
- Shell trading profits expected to rise sharply amid oil price volatility
- Renewable energy division forecasts earnings up to $700m
- Qatar LNG assets damaged, cutting gas output by ~5%
- Oil prices remain >50% above last year despite ceasefire
- Shell working with governments to address supply crisis
Frequently asked questions
Why did oil prices spike during the Iran crisis?
Disruptions to oil and gas flows through the Strait of Hormuz caused supply concerns, driving prices up.
How much will Shell’s gas production decline?
Shell estimates a 5% drop, with daily output falling to between 880,000 and 920,000 barrels of oil equivalent.
