Shell's Profits Beat Expectations, Warns of Declining Output

Energy and petrochemical company Shell (Shell plc) released its first-quarter results on Thursday, with adjusted profits reaching $6.92 billion, higher than the analysts' expectation of $6.36 billion, and also above the $5.58 billion of the same period last year.

The core increase comes from the trading department. The Middle East conflict has amplified the fluctuations in oil and gas prices, expanding the buying-selling price gap, and also increasing arbitrage and customer hedging demands, which has allowed Shell's trading division to gain higher profit margins.

Trading gains cannot fully mask the production pressures. Shell warned that affected by the Middle East conflict, production in the second quarter will decrease, with the integrated gas business production expected to drop from 909,000 barrels of oil equivalent per day in the first quarter to between 580,000 and 640,000 barrels of oil equivalent per day.

The upstream business will also slow down in tandem. The company expects upstream production in the second quarter to be between 1.62 million and 1.82 million barrels of oil equivalent per day, lower than the 1.84 million barrels of oil equivalent per day in the first quarter. Reuters reported that Shell's oil and gas production decreased by 4% compared to the previous quarter, reasons including the war between the United States and Israel against Iran and the damage to the Pearl Gas Plant in Qatar, with the related repairs potentially taking about a year.

Changes in capital returns have further reinforced market caution. Shell reduced the share repurchase scale from $3.5 billion in the previous quarters to $3 billion for this quarter, and the debt-to-equity ratio, including lease liabilities, has also risen from 20.7% at the end of 2025 to 23.2%.