LONDON, April 8, 2026, 13:19 BST
Shell Plc warned on Wednesday that first-quarter gas output would miss earlier guidance and that sharp swings in commodity prices could leave working capital between negative $10 billion and negative $15 billion, even as oil trading and fuel marketing strengthen. The trading update, issued ahead of next month’s results, is one of the first hard reads on how the Iran conflict is reshaping a major oil company’s quarter. 1
That matters now because the market has already turned again. Brent fell below $100 a barrel after a two-week U.S.-Iran ceasefire announcement, but shares in BP, Shell and TotalEnergies were still down about 6% to 9% in Europe as investors weighed how much of the first-quarter windfall will stick. 2
Shell cut first-quarter integrated gas guidance to 880,000 to 920,000 barrels of oil equivalent per day from 920,000 to 980,000 previously. It kept liquefied natural gas, or LNG, output within prior range at 7.6 million to 8.0 million tonnes, helped by LNG Canada, while lifting indicative refining margins to $17 a barrel from $14 and saying trading in chemicals and products should be significantly higher than in the fourth quarter. 3
The gas weakness runs through Qatar. Shell’s Pearl gas-to-liquids plant, which turns natural gas into liquid fuels, stopped production after attacks on Ras Laffan Industrial City in March, and Reuters reported one damaged train could take about a year to fully repair. 4
Cash is the other issue. Shell said working capital — a short-term measure of cash tied up in inventories and receivables — is expected at negative $10 billion to negative $15 billion because the price shock distorted inventory and receivable values. Reuters said RBC lifted its first-quarter net income estimate to $6.8 billion and UBS to $6.9 billion. 1
Analysts were already pricing in a strong quarter before Wednesday’s move in crude. On March 26, Roth Capital Partners analyst Leo Mariani said, “The first quarter is going to be phenomenal for these companies,” and Reuters reported that analysts covering Shell had been revising estimates higher before Wednesday’s note. 5
Peers are showing the same whiplash. Exxon said on Wednesday that higher oil and gas prices could add up to $2.9 billion to first-quarter upstream earnings even after the conflict cut its output by 6%. Finance chief Neil Hansen said a downstream accounting hit would “unwind over time.” 6
Sawan has been warning for weeks about the supply side. “Countries cannot have national security without energy security,” Shell Chief Executive Wael Sawan said at CERAWeek last month, warning Europe could start feeling shortages as the disruption moved from jet fuel to diesel and gasoline. 7
That risk has not gone away. Reuters reported physical oil markets remain stressed despite Brent’s drop. Hargreaves Lansdown analyst Matt Britzman said freer traffic through Hormuz “feels essential” if prices are to keep trending lower, while the European Commission has separately said the energy crisis will not be short-lived. 8
Shell said stronger marketing, oil trading and higher refining margins should partly offset the gas hit, and its renewables and energy solutions unit is expected to post adjusted earnings of $200 million to $700 million. Full first-quarter results are due on May 7. 1
