Shell tops profit estimates as Iran war boosts oil price

Source Credit : Portfolio Prints

British energy giant Shell on Thursday posted stronger-than-expected first-quarter earnings as the Iran war triggered a sharp rally in global energy prices and intensified volatility across oil markets.

The company reported adjusted earnings of $6.92 billion for the first three months of the year, comfortably ahead of analyst expectations of $6.1 billion, according to an LSEG consensus estimate. Shell’s own analyst survey had projected first-quarter profit of $6.36 billion.

The result marked a significant improvement from the $5.58 billion Shell earned during the same period a year earlier and more than doubled the $3.26 billion reported in the final quarter of 2025.

“Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets,” CEO Wael Sawan said in a statement.

Despite the earnings beat, Shell reduced the pace of its share buyback program to $3 billion from $3.5 billion in the previous quarter. The company also announced a 5% increase in its dividend, raising the payout to $0.3906 per share.

The earnings surge comes as global energy majors benefit from a dramatic spike in fossil fuel prices following the U.S.- and Israeli-led conflict with Iran that began on Feb. 28. Markets have been rattled by severe disruptions around the strategically critical Strait of Hormuz, a route vital to global oil and gas flows.

The International Energy Agency has described the situation as one of the most significant energy security threats in modern history, with fears of supply disruptions driving oil prices sharply higher.

Crude prices have risen roughly 40% since the conflict erupted, although both Brent crude futures and West Texas Intermediate futures retreated in the previous session amid hopes of a potential de-escalation.

Shell’s net debt climbed to $52.6 billion at the end of the first quarter, up from $45.7 billion at the close of 2025, reflecting the impact of higher commodity prices and increased working capital requirements.

“Shell’s Q1 results are better than expectations, both market expectations and my own expectations,” Maurizio Carulli of Quilter Cheviot Investment Management told CNBC’s “Squawk Box Europe.”

He noted that the increase in debt was the primary weak point in the report but said the rise was largely tied to inventory valuation effects during a period of surging oil prices.

Last month, Shell announced a $16.4 billion deal to acquire Canadian energy producer ARC Resources, including debt and lease obligations, in a move designed to expand production capacity and strengthen its North American resource portfolio.

Sawan described ARC Resources — a major producer in the Montney shale basin spanning British Columbia and Alberta — as “a high-quality, low-cost and top quartile low carbon intensity producer” that would reinforce Shell’s long-term energy strategy.

Shares of Shell fell around 2% in Thursday morning trading. Even so, the London-listed stock remains up roughly 15% year-to-date, although it has underperformed rivals including BP, TotalEnergies, Exxon Mobil and Chevron.