By Adam Whittaker

Shell said its first-quarter earnings more than doubled, helped by oil trading and higher prices, but the energy major warned of lower gas production due to the conflict in the Middle East, and launched a lower buyback than in previous quarters.

The British energy giant's adjusted earnings--a closely watched metric that strips out certain commodity price adjustments and one-time charges--rose to $6.915 billion from the $3.26 billion it reported in the prior quarter. Analysts had expected $6.36 billion, according to estimates compiled by Vara Research.

Around a fifth of the world's daily oil and gas supply has been unable to exit the Strait of Hormuz since the U.S. and Israel launched their first attacks on Iran in late February. The crucial shipping lane was first made virtually impassable by the threat of Iranian attacks on vessels and is now subject to a U.S. blockade.

Energy majors have capitalized on the higher oil and gas prices. Traders have also delivered bumped profits as they exploit market volatility. Earnings within Shell's chemicals and products division, which houses its oil traders, surged to $1.925 billion from a $66 million loss in the prior quarter.

While the higher prices have offered a cash windfall, some energy companies have been forced to cut production in the region. Some have suffered direct hits on energy facilities that will take years and billions of dollars to fix. Investors want to know how long it will take companies to restore production once the conflict ends.

Shell has lost roughly 10% of its total production due to damaged or shutdown assets in Qatar, where it owns the Pearl gas-to-liquids facility and has a 30% stake in a QatarEnergy LNG facility.

The Pearl GTL was damaged by an Iranian attack in March. One facility--referred to as a train--will take around a year to fix while the other remains unaffected.

Shell said Thursday that it expects it will be able to restart production from the undamaged train as soon as the conflict allows. This restart, however, is dependent on being able to move production through the Strait of Hormuz, Shell finance chief Sinead Gorman said. Production in Oman, which also represents around 10% of its hydrocarbon volumes, has so far been unaffected by the war.

The disruption means that for the second quarter, production from Shell's integrated gas unit is forecast to fall to between 580,000 and 640,000 barrels of oil equivalent a day, from 909,000 in the first quarter.

Upstream production is expected at between 1.62 million and 1.82 million barrels of oil equivalent a day, from 1.84 million barrels of oil equivalent a day over the first quarter. This decline reflects planned maintenance and isn't due to the conflict, Shell said.

The company said it would buy back $3 billion of shares, down from the $3.5 billion buybacks it has announced in recent quarters. However, it raised its interim dividend by 5% to $0.3906 a share.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

May 07, 2026 03:52 ET (07:52 GMT)

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