As Shell prepares to unveil its financial results for the first quarter of 2026, analysts are keenly observing how escalating tensions in the Middle East may influence its earnings and production levels. With energy prices soaring due to geopolitical unrest, the British oil and gas giant is expected to report significant gains alongside challenges stemming from disruptions in its Qatari gas operations.
Anticipated Earnings Surge
Scheduled for release on Thursday, Shell’s earnings report is projected to show adjusted earnings of approximately $6.36 billion (£4.66 billion) for the first quarter. This figure represents a notable increase of around 14% compared to the $5.58 billion (£4.09 billion) recorded during the same period last year. Analysts at AJ Bell, Russ Mould and Danni Hewson, noted that Shell’s earnings forecasts have surged by nearly 50% since hostilities escalated between the US and Israel and Iran, driving up oil and gas prices.
The company informed investors earlier this month that its trading activities in chemicals and products—including oil trading—are set to be “significantly higher” than in the previous quarter, thanks to the rising energy prices. The conflict has severely impacted production in the region, leading to heightened demand and inflated prices.
Oil Prices Reach New Heights
Recent market trends have seen Brent crude oil prices spike, reaching a four-year high of $126 a barrel last Thursday before slightly retracting to about $110 a barrel. The ongoing conflict has led to disruptions in the crucial Strait of Hormuz shipping corridor, further complicating the global energy landscape.
Despite the promising earnings forecast, Shell has warned that its gas production is expected to fall short of previous estimates due to the impact of regional attacks. Notably, the PearlGTL site in Qatar was forced to halt production following strikes, and liquefied natural gas (LNG) facilities partially owned by Shell have also felt the repercussions.
Production Challenges Ahead
For the current quarter, Shell has adjusted its gas production forecast to between 880,000 and 920,000 barrels of oil equivalent per day (BOED), a decline from the earlier estimate of 920,000 to 980,000 BOED. This marks a decrease from the 948,000 BOED achieved in the final quarter of the previous year.
These production challenges come at a time when rival BP has released figures showing its profits more than doubled in the same timeframe, heightening expectations for Shell’s performance.
Adding to the mix, Shell recently announced a $16.4 billion (£12.1 billion) acquisition of Canadian energy firm ARC Resources. This deal is anticipated to enhance Shell’s gas production capabilities and reserves, ensuring long-term growth for the company.
Market Reactions and Investor Expectations
Richard Hunter, head of markets at Interactive Investor, commented on the market environment: “The recent BP numbers, where the group doubled its first quarter profit, have led to heightened expectations at Shell.” With the acquisition of ARC Resources, which is expected to contribute an additional 370,000 barrels of oil per day, Shell is poised for a significant boost in free cash flow starting next year.
Investors will be keenly awaiting updates on Shell’s trading performance, profit margins, and any ongoing production challenges that may arise from the conflict in the Middle East.
Why it Matters
The forthcoming earnings report from Shell is significant not only for the company and its shareholders but also for the wider energy market. As geopolitical tensions continue to disrupt supply lines, the outcome of Shell’s results may offer insights into the resilience of the oil and gas sector. With prices climbing and production facing obstacles, how Shell navigates these challenges could set the tone for the industry’s trajectory in the coming months.
