Shell reported a $10 billion to $15 billion working capital boost in Q1, driven by surging oil trading profits despite Middle East conflict disruptions. The company’s integrated gas production fell to 880,000-920,000 barrels of oil equivalent daily, below its forecast range, as Ras Laffan facilities in Qatar faced extensive damage from missile strikes. This includes the world’s largest LNG export terminal, which had supplied 20% of global seaborne gas shipments before the war.

The Iran war triggered chaos in the Strait of Hormuz, crippling oil shipments and damaging Shell’s joint ventures across Iraq, Oman, and the UAE. Refining margins rose to $17 per barrel, up from $14 in Q4, as energy prices spiked. A temporary US-Iran ceasefire briefly eased tensions, yet prices remain 50% higher year-over-year. Shell’s Q1 earnings update, the first since the conflict erupted, highlights how geopolitical risks are reshaping Big Oil strategies.

Ras Laffan’s repair timeline—expected to take a year—underscores the long-term operational challenges. The gas-to-liquids facility hit by strikes will require significant investment to restore output. Meanwhile, oil trading gains offset losses in physical production, showcasing Shell’s adaptability. Analysts note the war’s dual impact: short-term profit opportunities amid volatility, but long-term infrastructure risks.

Energy markets remain volatile as the ceasefire’s fragility and repair timelines loom. Shell’s resilience in trading versus production shortfalls signals a shifting balance in corporate priorities. Investors will watch how the company navigates Middle East instability while capitalizing on elevated oil prices.