Shell has upgraded its second-quarter integrated gas production guidance after stronger-than-expected output from its global operations offset disruption in Qatar, while elevated oil and gas prices boosted earnings from its trading businesses.
In a trading update ahead of its second-quarter results, the energy major said integrated gas production for the April-to-June period is expected to come in above previous guidance, despite ongoing disruption at its Pearl gas-to-liquids (GTL) facility in Qatar following missile strikes earlier this year.
Production at Pearl has remained suspended since the attacks in March, when escalating conflict in the Middle East disrupted energy infrastructure across the region. Shell also has interests in liquefied natural gas (LNG) facilities in Qatar that were affected during the conflict.
However, stronger operational performance at other assets has helped compensate for lost Qatari output, allowing the company to improve its production outlook.
The update also points to another strong quarter for Shell’s trading operations, historically one of the group’s most profitable businesses during periods of heightened commodity price volatility.
Shell said earnings from its gas trading division are expected to be “significantly higher” than during the first quarter, while results from its chemicals and products business—including oil trading—should broadly match the previous quarter’s robust performance.
The chemicals and products division generated underlying earnings of $1.93 billion in the first quarter, more than four times higher than a year earlier, reflecting exceptionally strong refining and trading margins.
Energy markets experienced sharp volatility following the outbreak of conflict involving Iran earlier this year, with Brent crude briefly rising above $120 a barrel amid concerns over shipping through the Strait of Hormuz.
Although prices have since retreated to around $73 a barrel following an interim peace agreement, the period of elevated prices and disrupted supply created favourable conditions for major integrated energy traders.
Chris Beauchamp, chief market analyst at IG, said Shell had benefited from stronger refining margins and improved trading conditions despite production setbacks in Qatar.
He noted that while the decline in oil prices has weighed on Shell’s share price in recent weeks, resilient trading profits could help underpin shareholder returns through dividends and cash distributions.
For investors, the update underlines the value of Shell’s diversified business model.
While upstream production remains exposed to geopolitical disruption, its global trading operations continue to provide an important earnings buffer during periods of heightened volatility in energy markets.
With commodity prices stabilising but geopolitical risks remaining elevated, Shell’s second-quarter results are expected to offer further insight into how integrated energy companies are balancing operational disruption against exceptionally strong trading performance.
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