Shell Projects Reduced Gas Output, Capital Outflow Amid Iran Conflict, Expects Oil Trading Boost
London, April 8 — Shell said on Wednesday that weaker first‑quarter gas volumes and temporary liquidity stress will be partly offset by stronger trading results. The company flagged large working capital swings tied to price volatility and outlined a lowered gas production outlook for the quarter.
Market moves and regional disruptions
Oil prices surged after late‑February strikes linked to the Israel‑Iran conflict. Brent crude climbed toward $120 a barrel, near multi‑year highs. Tehran’s closure of the Strait of Hormuz and attacks on Gulf facilities intensified volatility.
One affected site was Shell’s Pearl gas production plant in Qatar. Shell said repairs there could take about a year. These disruptions helped push commodity values and liquidity measures to extreme levels.
Impact on trading and products
Shell said its chemicals and products arm, which includes oil trading, saw a marked improvement in results. The company Expects Oil Trading Boost compared with the prior quarter. Marketing revenues and adjusted earnings were also set to rise.
Gas production guidance lowered
The company reduced its first‑quarter integrated gas production guidance. The new range is 880,000–920,000 barrels of oil equivalent per day. That replaces prior guidance of 920,000–980,000 boed.
For comparison, fourth‑quarter 2025 integrated gas production was 948,000 boed. Shell said LNG output remained within prior guidance. Australian constraints and Qatar outages were offset by ramp‑up at LNG Canada.
Working capital and balance sheet effects
Shell reported large inventory valuation swings caused by commodity price volatility. Working capital moved to between minus $10 billion and minus $15 billion in the quarter. The company expects these movements to unwind if prices moderate.
Net debt stood at $45.7 billion at the end of 2025. Gearing was 17.7%, below Shell’s 20% comfort level. Shell warned net debt would rise by $3 billion to $4 billion because of variable lease components tied to long‑term shipping contracts.
Analyst reactions
RBC raised its first‑quarter net income estimate to $6.8 billion. It forecast operating cash flow excluding working capital of about $17.1 billion. UBS increased its net income forecast to $6.9 billion and sees operating cash flow ex‑working‑capital near $16.3 billion.
UBS also models a larger potential net debt increase of roughly $11.2 billion. Analysts noted the scale of swings reflects unusual market conditions but said Shell’s balance sheet should absorb the shock.
Other business units and outlook
Shell expects adjusted earnings in renewables and energy solutions to rise. The range given was $200 million to $700 million, up from $131 million in the prior quarter. Full first‑quarter results are scheduled for release on May 7.
Filmogaz.com will monitor further updates as the company publishes its full quarterly report. The situation highlights how geopolitical shocks can drive both Capital Outflow Amid Iran Conflict and near‑term shifts in production forecasts.
- Event date: April 8 (announcement).
- Q1 integrated gas guidance: 880,000–920,000 boed.
- Prior guidance: 920,000–980,000 boed; Q4 2025 output: 948,000 boed.
- Working capital: −$10 billion to −$15 billion.
- Net debt end‑2025: $45.7 billion; gearing: 17.7%.
- Analyst net income forecasts: RBC $6.8bn; UBS $6.9bn.
- Full results due: May 7.
