Shell has announced a sharp increase in profits for the first quarter of 2026, surpassing analyst expectations, as the Iran war continues to drive up global oil prices.
Strong Financial Performance
The oil giant reported underlying earnings of $6.92 billion (£5.09 billion) for the three months to March, more than double the previous quarter and 24% higher than the same period last year. Analysts had forecast profits of $6.36 billion (£4.67 billion).
Shell attributed the strong performance to soaring crude oil prices, which boosted its oil trading business. The chemicals and products division saw underlying earnings more than quadruple to $1.93 billion (£1.41 billion) from $449 million (£330 million) a year earlier.
Shareholder Returns
The company announced an additional $3 billion (£2.2 billion) in share buybacks over the next three months and a 5% 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.”
Criticism Over Conflict Profits
However, Shell has faced criticism for profiting from the Middle East conflict. Tessa Khan, executive director of 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.” She added that the public increasingly sees through the industry’s claims that more oil and gas production is in their interests.
Market Outlook
Derren Nathan, head of equity research at Hargreaves Lansdown, noted that Shell will continue to benefit even if a peace resolution is reached, as oil prices are unlikely to return to pre-war levels below $70 per barrel. “Shell’s first quarter underlying earnings came in nearly $1bn ahead of forecasts against a backdrop of unprecedented disruption in energy markets,” he said.
Shell’s facilities in Qatar have been damaged by attacks, impacting its integrated gas operations. The company recently agreed to acquire Canadian energy firm ARC Resources for $16.4 billion (£12.1 billion), a move Sawan said will “deliver value for decades to come.”
Industry Context
Rival BP also reported better-than-expected results last week, with first-quarter profits more than doubling to $3.2 billion (£2.35 billion). Both companies have been accused of profiting at the expense of households as fuel prices rise. Brent crude oil reached $126 per barrel last week, the highest in four years, before falling back amid hopes of a peace deal, but remains above $100.
