Shell is expecting a strong first-quarter performance, driven largely by rising oil prices and heightened volatility in global energy markets, even as parts of its gas operations face setbacks.
In a trading update ahead of its full results, the energy giant said earnings from its oil trading and marketing divisions are set to be “significantly higher,” reflecting gains from surging crude prices triggered by geopolitical tensions in the Middle East.
The spike in oil prices linked to the ongoing Iran-related conflict and disruption of key supply routes has created favourable conditions for trading activities, boosting margins across Shell’s oil business.
However, the company also flagged challenges in its gas segment. Shell expects lower natural gas production for the quarter, estimated between 880,000 and 920,000 barrels of oil equivalent per day, down from previous levels. This decline is largely attributed to disruptions in Qatar following attacks on energy infrastructure.
Despite these setbacks, the company indicated that stronger oil trading performance and improved refining margins are likely to offset the impact of reduced gas output. Analysts have also pointed to increased earnings expectations, driven by the broader surge in energy prices.
Shell also noted continued volatility in commodity markets, which has affected its working capital and may lead to increased debt levels in the short term. Nevertheless, its diversified portfolio—including contributions from renewables and LNG projects is expected to support overall financial stability.
The company is scheduled to release its full first-quarter results on May 7, with investors closely watching how geopolitical developments continue to shape its performance.
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