In the second quarter, Shell's trading division continued to benefit from market volatility triggered by conflict in the Middle East, yet reduced natural gas supply from Qatar weighed on the company's gas production. This highlights the uneven impact of the conflict on major energy firms.

The British energy giant stated that its integrated gas trading division benefited from higher prices, with performance expected to be significantly above the first quarter. The lag effect in contracts typically means the impact of price rises is felt later. Shell's oil trading division, which generated substantial profits earlier this year, is also anticipated to post robust results this quarter.

Shell indicated that while its integrated gas production will see a significant sequential decline, it has slightly raised its production guidance to 610,000-650,000 barrels of oil equivalent per day, up from a prior range of 580,000-640,000 barrels, due to strong output from assets outside the affected region. The division produced 909,000 barrels per day in the first quarter, and the expected drop reflects the conflict's impact on supply volumes from Qatar.

Tensions between the US and Iran kept oil prices elevated for much of the second quarter, though prices have fallen substantially since a preliminary peace agreement was reached in mid-June.

The war also led to turbulence in energy markets, from which Shell's large trading operations were able to profit.

Shell said performance from its oil trading division is expected to be in line with the prior quarter. While it does not report trading results separately, adjusted earnings for its Chemicals & Products segment, which includes oil trading, surged to $1.925 billion in Q1, compared to a $66 million loss in Q4 last year.

Despite slow progress in peace talks, supply through the Strait of Hormuz is recovering, and analysts have lowered their oil price forecasts for the remainder of the year. Around 20% of global crude oil typically transits this strait.

While Shell's trading arm profited, its integrated gas production was negatively affected by the hostilities.

In May, Shell stated it had lost roughly 10% of its total production due to damage or shutdowns at its assets in Qatar. The company operates the large Pearl gas-to-liquids (GTL) plant in Qatar and holds a 30% stake in a QatarEnergy liquefied natural gas (LNG) facility.

Chief Executive Wael Sawan said in June that the Pearl GTL plant was damaged by an Iranian attack in March, with one production train affected. The company hopes to restore it by early next year. Production at another train has been halted, with Shell expecting to restart it once conditions in the strait permit.

The company raised its second-quarter LNG sales volume guidance to 7.4-7.8 million tonnes, from a previous outlook of 6.8-7.4 million tonnes.

Upstream production, the extraction of crude oil and natural gas, is forecast at 1.75-1.85 million barrels of oil equivalent per day, higher than the prior guidance range of 1.62-1.82 million barrels.

Shell anticipates its refining margin will rise to around $20 per barrel from $17 per barrel in the first quarter, with refinery utilization at approximately 100%.

The company's shares opened 2.3% higher on Tuesday.