Shell has reported a sharp rise in first-quarter earnings, becoming the latest oil major to benefit from the market turmoil triggered by the Iran war. The company said profit reached $6.92 billion in the first three months of the year, underscoring how conflict-related supply fears are reshaping global energy prices and corporate returns.
What Happened
The London-listed energy group said adjusted profit for January to March climbed from $5.58 billion a year earlier to $6.92 billion, ahead of market expectations. Shell’s update follows similar announcements from rivals as crude prices swung violently after the US-Israel war with Iran disrupted flows through the Strait of Hormuz, a critical maritime route that normally handles roughly one-fifth of global oil and liquefied natural gas shipments.
Chief executive Wael Sawan said the company had delivered robust performance despite what he described as exceptional dislocation in world energy markets. He added that staff safety remained the company’s top concern while Shell worked with governments and customers. The company also pointed to stronger results in trading and improved refining margins, both of which can be amplified when benchmark prices move quickly.
The scale of volatility has been stark. Brent crude traded near $73 a barrel before the conflict, later surged above $120, then slipped below $100 amid changing expectations over when Hormuz might reopen. It is now around $101. Shell said output of oil and gas fell 4% from the previous quarter, reflecting disruption. Its LNG production in Qatar has been offline since early March, and its Pearl GTL facility in the country has sustained damage from attacks. Separately, Shell last week agreed to buy Canadian shale producer ARC Resources for $16.4 billion.
Impact & Consequences
The latest earnings figures reinforce a familiar pattern in geopolitical crises: upstream producers and trading operations can gain from price spikes and dislocation even as end users absorb higher costs. For consumers, the immediate concern is that elevated wholesale prices feed through to household bills and transport expenses. In Britain, most homes are temporarily shielded by the regulator’s price cap, with a typical dual-fuel direct-debit bill set at £1,641 annually until 30 June.
However, estimates now suggest the cap could rise by around £200 when reset in July because oil and gas prices have climbed since hostilities began. That projection has sharpened the political debate over who bears the burden of conflict-driven inflation. While major producers post higher profits, governments face pressure to protect households and avoid deeper cost-of-living strain as energy markets remain unstable.
Background & Context
Shell’s results come days after BP reported that first-quarter profit had more than doubled, and after Norway’s Equinor posted $9.77 billion for the same period, its strongest quarterly result in three years. Together, these updates indicate that the current shock is broad-based across large integrated producers, especially those with sizable trading desks and refining portfolios that can capture wider spreads during turbulent periods.
The renewed focus on windfalls also revives policy disputes that emerged after Russia’s full-scale invasion of Ukraine in 2022. In the UK, energy producers already face the Energy Profits Levy, introduced to tax extraordinary returns. The Labour government has extended that measure to March 2030. But the levy applies only to profits from UK extraction, while multinational groups earn much of their income from overseas operations, limiting the measure’s reach in episodes like the current crisis.
International Response
Environmental campaigners said the latest profit surge shows why governments should tighten fiscal measures on fossil-fuel earnings. Danny Gross of Friends of the Earth argued that producers were collecting outsized gains while motorists and households face steeper costs, and called for a stronger windfall tax alongside faster investment in domestically produced renewable power.
Companies, meanwhile, have emphasized operational resilience and supply obligations. Shell has framed its response around staff protection, coordination with public authorities, and maintaining customer deliveries under severe market stress. Across importing economies, policymakers are balancing three competing objectives: ensuring supply security, containing inflation, and preserving enough investment to prevent deeper shortages if regional disruption persists.
What to Expect Next
Attention now turns to whether shipping through Hormuz normalizes, as that will heavily influence crude and LNG pricing in coming weeks. Investors will watch second-quarter earnings for signs that trading and refining gains can offset production interruptions. In the UK, households and businesses are awaiting July’s updated price cap, while ministers face renewed calls to revisit windfall taxation if corporate profits stay elevated and consumer bills continue rising.
