Shell on Thursday reported surging profits in the first quarter, as the Iran war led to a rise in oil prices, while the most significant impacts for the British energy company have been in Qatar.
The oil giant reported adjusted earnings of $6.92 billion, beating estimates, while raising the dividend by 5 per cent. It amounts to a 19 per cent increase in net profit. Shell also cut its quarterly share buyback programme from $3.5 billion to $3 billion.
"Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets," chief executive Wael Sawan said.
The effective closure of the Strait of Hormuz and Iranian attacks on key energy sites across the Middle East have led to a major oil shock, where prices have risen about 40 per cent since the war began on February 28.
Brent crude was trading 3.91 per cent lower on Thursday at $97.47 a barrel, as traders assessed tension between the US and Iran. West Texas Intermediate, which tracks US crude, was trading 3.91 per cent lower at $91.36 a barrel.
Qatar LNG
The company also said its oil and gas output had fallen by 4 per cent compared to the fourth quarter last year, due to the war.
Shell's chief financial officer Sinead Gorman said the most significant impacts for the company have been in Qatar, where its assets at the Ras Laffan complex were damaged by Iranian strikes.
Qatar, the second-largest global exporter of liquefied natural gas (LNG), in March announced a halt to production at the Ras Laffan refinery and declared force majeure on LNG shipments.
Ms Gorman said it would take a year to return for the damaged to return to normal service, at a cost "well below" half a billion dollars.
The company said impact on its hydrocarbon production in the Middle East has varied by country, noting that its position in Oman accounts for about 10 per cent of its global volumes that do not pass through the Strait of Hormuz.
"Overall, this was a strong set of results in a period of volatility and uncertainty stemming from the conflict in the Middle East," Ms Gorman said.
Shell last week announced it had entered an agreement to acquire Canadian energy company ARC Resources to boost its long-term oil and gas production.
