Shell has announced rocketing profits for the first three months 2026 which outstrip even analyst expectations, thanks to rocketing oil prices caused by the Iran war.
The oil giant reported underlying earnings of $6.92 billion (£5.09 billion), more than double the result in the previous three months and 24% higher on a year ago. Most analysts had expected the group to report profits of $6.36bn (£4.67bn).
However, like rival BP, the company has come in for attacks from policy groups for profiting enormously from a conflict which is set to see UK households face big bill increases, across energy, food and transport over the course of the year.
Shell said the soaring cost of crude had boosted its oil trading business, and the wider chemicals and products division saw underlying earnings more than quadruple to $1.93bn (£1.41bn) from $449m (£330m) a year earlier.
The group also announced more returns for shareholders, with another $3bn (£2.2bn) in share buybacks for the next three months and a 5 per cent increase in its dividend payout.
Chief executive Wael Sawan said: “Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets.
“The safety of our people remains our priority as we work closely with governments and customers to address their energy needs.”
The company – and others in the industry – has come in for criticism for reaping rewards from the conflict in the Middle East, however. Tessa Khan, executive director at climate transition organisation Uplift, said: “Time and again, global conflict drives up the price of oil and gas – and time and again it is ordinary households that pay the price.
“These profit announcements are just another unwelcome reminder of how the current energy system is stacked against ordinary people, who are expected to keep weathering economic shocks brought about by our dependence on oil and gas.
“It is clear, the public increasingly see through the industry’s claims that more oil and gas production is in our interests. Instead of more drilling that will profit oil firms and their executives, people want real solutions that will bring down their bills and protect them from future crises.
“That means investing in clean, homegrown energy and helping households switch from volatile oil and gas to clean electricity to power their lives – whether that’s with solar panels, heat pumps or electric vehicles.”
On the results, Derren Nathan, head of equity research at Hargreaves Lansdown, said Shell will continue to benefit in the mid-term as even a peace resolution is unlikely to see global oil prices revert to the $70 and lower that they stood at prior to the Iran war starting.
“Shell’s first quarter underlying earnings came in nearly $1bn ahead of forecasts against a backdrop of unprecedented disruption in energy markets. Its trading and optimisation activities contributed strongly but improved refining margins, cost discipline and higher prices all played their part,” he said.
“The immediate outlook for integrated gas has been impacted by damage to Shell’s facilities in Qatar. The proposed acquisition of ARC resources for $16.4bn goes some way towards diversifying supply, but with net debt up 27% over the last year to $52.6bn, management has slowed the pace of share buybacks slightly. Overall, Shell is benefitting from the higher energy price environment, and even if the Strait of Hormuz does reopen, we don’t think prices are unlikely to go back to pre-war levels.”
Rival BP also reported far better than expected results last week, as first quarter profits more than doubled to $3.2bn (£2.35bn) as its traders were able to capitalise on highly volatile oil prices.
BP came under fire from campaigners, who accused BP of profiting at the expense of households as fuel prices have rocketed at the pumps, and who are likely to see energy bills jump higher when the price cap is updated on July 1.
Brent crude oil, jet fuel and gas prices have all surged after production was hit by attacks in the region, and the important Strait of Hormuz shipping corridor remains heavily disrupted.
The price of crude reached $126 a barrel last week, the highest level in four years, before falling back amid hopes of a peace deal, but still remains above $100.
However, Shell has had its facilities disrupted, and in March its PearlGTL site in Qatar stopped production after being hit during attacks. LNG facilities in the country partly owned by Shell have also been affected.
Shell said it was not taking an impairment charge in the first quarter despite “production shutdowns and export constraints”.
The group also recently agreed a $16.4bn (£12.1bn) deal to buy Canadian energy firm ARC Resources, which Mr Sawan said will “deliver value for decades to come”.
Additional reporting by PA
