Shell Posts Strong Q1 Profit as Iran War Disrupts Global Energy Markets

BBC Business reported Thursday that Shell posted first-quarter profits of $6.92 billion, surpassing analyst expectations. The result marks a sharp improvement from the $5.58 billion recorded in the same quarter a year ago. The Iran war’s impact on global oil supply was a primary driver.

Hormuz Closure Squeezes Global Oil Supply

The Strait of Hormuz has been effectively shut since the US-Israel conflict with Iran escalated. That waterway normally handles roughly 20% of the world’s oil and liquefied natural gas shipments. Its closure has pushed crude prices substantially higher, boosting revenues across the sector. Shell’s trading division was a particular beneficiary. Volatile price swings tend to widen the spread between buying and selling prices, handing skilled traders an outsized margin advantage.

Shell CEO Wael Sawan told BBC Business the company delivered strong results through a focus on operational performance. He described the quarter as marked by unprecedented disruption in global energy markets. Sawan added that staff safety remains paramount as the company works with governments and customers on their energy needs.

BP Also Benefited Earlier This Week

Shell’s blowout quarter follows a similarly striking result from rival BP. The company announced last week that its first-quarter profits had more than doubled, also citing the Iran war’s effect on prices and trading conditions. Both majors have leaned on their trading desks to capitalise on the dislocation in global energy flows since the conflict began.

Output Fell Despite Revenue Gains

Not all the news was positive for Shell. The company said its combined oil and gas production dropped 4% compared with the final quarter of 2025. The conflict damaged Shell’s Pearl gas processing facility in Qatar, directly reducing output volumes. That production shortfall underscores how the same geopolitical event that inflated energy prices has simultaneously constrained supply chains for producers with regional exposure.

What Comes Next for Energy Markets

Analysts will now watch whether the Hormuz closure persists through the second quarter. A prolonged disruption would sustain elevated prices but could also accelerate demand destruction. The UAE’s recent exit from OPEC adds another variable, potentially undermining the cartel’s ability to manage output decisions. Shell has not issued formal guidance for Q2, but trading conditions remain exceptionally fluid.

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