Shell tops profit estimates as Iran war drives crude price surge

British energy major Shell on Thursday reported stronger-than-expected first-quarter profit as the Iran war sent energy prices soaring.

The oil giant posted adjusted earnings of $6.92 billion for the first three months of the year, beating analyst expectations of $6.1 billion, according to an LSEG-compiled consensus. A separate, company-provided analyst forecast had put Shell’s expected first-quarter profit at $6.36 billion.

Shell reported adjusted earnings of $5.58 billion over the same period a year ago and $3.26 billion over the final three months of 2025.

“Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets,” Shell CEO Wael Sawan said in a statement.

Shell cut the pace of its quarterly buyback to $3 billion, down from $3.5 billion, and announced a 5% increase in its dividend to $0.3906 per share.

The earnings come as energy supermajors experience a significant share price boost, with fossil fuel prices soaring since the U.S. and Israeli-led war against Iran began on Feb. 28.

Ongoing and severe disruption through the strategically vital Strait of Hormuz has resulted in what the International Energy Agency has described as the biggest energy security threat in history.

Oil prices have climbed roughly 40% since the Iran war began, although both Brent crude futures and U.S. West Texas Intermediate futures fell sharply in the previous session amid hopes of an end to the conflict.

Shell’s net debt came in at $52.6 billion at the end of the first quarter, up from $45.7 billion at the end of last year.

“Shell’s Q1 results are better than expectations, both market expectations and my own expectations,” Maurizio Carulli, equity research analyst at Quilter Cheviot Investment Management, told CNBC’s “Squawk Box Europe” on Thursday.

“Net debt is probably the only minor negative because it has increased from $45 [billion] to $46 billion at the end of the past year to $52.6 billion this quarter. This is, however, 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,” he added.

Last month, Shell announced it had agreed to buy Canadian energy company ARC Resources in an output-boosting deal valued at $16.4 billion, including net debt and leases.

Shell CEO Wael Sawan described ARC Resources, which is focused on the Montney shale basin in the Canadian provinces of British Columbia and Alberta as “a high-quality, low-cost and top quartile low carbon intensity producer” that would strengthen the firm’s resource base for decades.

Shares of Shell dipped 2% on Thursday morning. The London-listed stock has clocked gains of around 15% year-to-date, lagging the likes of BP, TotalEnergies, Exxon Mobil and Chevron.