Energy giant Shell plc has reported a sharp rise in first-quarter profits, benefiting from soaring oil and gas prices triggered by the ongoing conflict involving Iran and disruptions to global supply routes.
The company posted adjusted earnings of about $6.9 billion, beating expectations and marking its strongest quarterly performance in nearly two years.
The surge was largely driven by volatility in energy markets, with prices climbing as tensions in the Middle East affected supply, particularly through the strategically critical Strait of Hormuz. The waterway typically carries around one-fifth of the world’s oil and liquefied natural gas, meaning any disruption has an immediate global impact.
As supply tightened, oil prices rose sharply, allowing Shell to sell crude and refined products at higher margins. The company’s trading and refining divisions were among the biggest beneficiaries, capitalising on price swings and market instability.
Despite the strong earnings, the situation is not entirely positive for the company’s operations. Shell reported a decline in overall oil and gas production, partly due to disruptions linked to the conflict, including damage to facilities in the region.
The company has responded by increasing its dividend by around 5% and continuing shareholder payouts, although it slightly reduced its share buyback programme to preserve financial flexibility amid ongoing uncertainty.
The broader context is key: the Iran-related conflict has created one of the most volatile energy market environments in recent years. Analysts say the disruption has removed significant supply from global markets, pushing prices upward and creating windfall gains for major oil companies with diversified operations.
However, the profit surge has also triggered criticism. Climate activists and policy groups argue that energy companies are benefiting disproportionately from geopolitical instability, especially as rising fuel costs translate into higher living expenses for consumers worldwide.
There’s also a market reality check. Even with strong earnings, Shell’s shares have shown some weakness, reflecting investor concerns about declining production levels and uncertainty around how long elevated oil prices will last.
At the global level, the situation highlights how deeply interconnected energy markets are with geopolitics. A single chokepoint like the Strait of Hormuz can influence prices, corporate profits, and economic stability across continents.
Bottom line: Shell didn’t just perform well because of internal efficiency—it rode a wave created by global disruption. That’s profitable in the short term, but it also exposes how fragile and reactive the energy system still is.
