Shell reported adjusted earnings of $6.92 billion for the first quarter of 2026, topping analyst expectations of $6.1 billion compiled by LSEG and well above the company's own forecast of $6.36 billion. The result marks a sharp jump from the $5.58 billion Shell posted in the same period a year ago and more than doubles the $3.26 billion the company earned in the final three months of 2025.
The surge in profit traces directly to the U.S. and Israeli-led war against Iran, which began on Feb. 28 and sent fossil fuel prices soaring roughly 40 percent. Disruption to shipping through the Strait of Hormuz, one of the world's most critical chokepoints for oil transit, has created what the International Energy Agency has described as the biggest energy security threat in history.
"Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets," CEO Wael Sawan said in a statement Thursday.
Despite the strong earnings, Shell trimmed its quarterly share buyback program to $3 billion from $3.5 billion. The company also raised its dividend by 5 percent to $0.3906 per share. Net debt rose to $52.6 billion by the end of March, up from $45.7 billion at the end of 2025, a jump analysts attributed largely to the mechanics of rising oil prices on inventory valuations.
Maurizio Carulli, equity research analyst at Quilter Cheviot Investment Management, told CNBC's "Squawk Box Europe" that the results cleared the bar on nearly every measure. "Shell's Q1 results are better than expectations, both market expectations and my own expectations," he said. On the debt increase, Carulli noted that it was "mainly because of the working capital effect, when you have rising oil prices, there is a negative effect in terms of the value of inventories."
Shell's shares fell 2.9 percent Thursday morning despite the earnings beat, a move some traders attributed to profit-taking after the stock had already gained roughly 15 percent year-to-date. That gain still trails several of Shell's closest rivals, including BP, TotalEnergies, Exxon Mobil, and Chevron, all of which have outperformed the London-listed company since the conflict began.
The earnings report came weeks after Shell announced a $16.4 billion deal to acquire Canadian energy company ARC Resources, including net debt and leases. ARC focuses on the Montney shale basin in British Columbia and Alberta. Sawan called ARC Resources "a high-quality, low-cost and top quartile low carbon intensity producer" that would strengthen Shell's resource base for decades. The deal has not yet closed.
Oil prices showed some volatility in the lead-up to Shell's report, with both Brent crude futures and U.S. West Texas Intermediate futures falling sharply in the prior session on hopes of a potential diplomatic resolution to the Iran conflict. If a ceasefire or deal materializes, energy analysts expect prices to pull back from their wartime highs, which could compress margins for Shell and other majors in coming quarters. For now, however, the war's disruption to Hormuz shipping continues to keep supply tight and prices elevated, and Shell's first-quarter numbers reflect what may be the clearest financial snapshot yet of how the conflict has reshaped global energy markets.
