Shell Signals Earnings Surge as Middle East War Boosts Oil Prices Despite Production Dip

A surge in oil prices driven by the Middle East conflict is set to deliver a major earnings boost for energy giant Shell plc, even as the crisis disrupts its production levels.

The company said its first-quarter performance will see a “significant” uplift, particularly in its marketing division, which includes its global network of fuel stations. The gains come as elevated crude prices offset operational challenges linked to the ongoing conflict.

Although oil prices dropped sharply following news of a temporary ceasefire between the United States and Iran, they remain well above levels recorded before the war began in late February. This sustained price strength has continued to support revenue across the sector.

Shell noted that gas production will decline compared with late 2025 levels, largely due to disruptions in Qatar — a key supplier. The conflict has affected output from major facilities, including the Ras Laffan industrial city, widely regarded as the world’s largest liquefied natural gas hub.

Qatar maintains long-term LNG supply agreements with several global players, including ENI, TotalEnergies, Petronet, and Sinopec, highlighting the broader impact of the disruption on international energy markets.

Despite the operational setbacks, Shell’s recent financial performance underscores its resilience. The company posted a net profit of nearly $18 billion last year, representing an 11 percent increase, driven by higher sales volumes and improved cost efficiency even as oil and gas prices softened.

Investor sentiment, however, reacted swiftly to the latest market shifts. Shares in Shell fell by more than six percent during trading on London’s FTSE 100, while rival BP also recorded losses of around seven percent, reflecting volatility in global energy markets.

The contrasting trends — rising earnings expectations alongside falling share prices — highlight the fragile balance facing oil majors as geopolitical tensions continue to reshape supply chains and investor confidence.