Sydney — March 31, 2026, 23:16 AEDT.
Shell Plc fired a warning shot at Australia on Tuesday, saying a planned windfall tax targeting liquefied natural gas (LNG) exporters could spook investors and undermine the country’s energy security—ratcheting up tensions with Canberra as prices run higher. After Iranian strikes knocked out Qatar’s production, Australia climbed to the world’s number two LNG spot, making the fate of any industry windfall even more pivotal. Reuters
Timing is critical for Shell right now. Analysts following the company have bumped up their first-quarter net profit forecasts by about 15%, on average, according to LSEG data. Shell’s quarterly update lands on April 8, putting extra focus on the numbers. What started as a political gas tax debate is suddenly an earnings story. Reuters
Prime Minister Anthony Albanese has directed Treasury to explore a windfall tax on gas profits, along with potential tweaks to the Petroleum Resources Rent Tax, or PRRT—a levy tied to oil and gas project earnings. On Monday, his government also cut fuel excise by half for three months and launched a nationwide fuel security initiative, moves aimed at easing the blow of rising prices for households. Reuters
Shell Australia chair Cecile Wake warned the Australian Domestic Gas Outlook conference in Sydney that stable policy settings could be sidelined in favor of “short-term measures or populist rhetoric.” The company exports from Queensland Curtis LNG and runs the Prelude floating LNG facility off northern Australia, making Shell vulnerable to changes in export regulations or tax regimes. Reuters
Chevron echoed similar concerns. Danny Woodall, who oversees operations and maintenance for the U.S. major in Australia, described a windfall levy as “knee-jerk” and claimed it was the “exact opposite” of what the country needed. Santos boss Kevin Gallagher added that every LNG cargo leaving Gladstone brings in about A$4.5 million in royalties for Queensland. Reuters
Money’s piling up, and so are the political headaches. Since February, Asia’s spot LNG prices have shot up to their highest in three years—doubling along the way. Brent crude jumped 59% during March. Last year, Australia sent out A$65 billion worth of LNG. About three-quarters of those sales lock in long-term deals linked to oil prices, which means it can take three to six months before the full earnings boost kicks in. Reuters
Shell heads into this stretch after wrapping up 2025 on a softer note. The oil giant fell short of fourth-quarter profit forecasts in February, though it stuck with its $3.5 billion quarterly buyback and bumped up its dividend by 4%. Now, sentiment has flipped. Leo Mariani at Roth Capital Partners called the first quarter “phenomenal” for the majors. Reuters
Shell isn’t just profiting from the upheaval. Attacks earlier this month damaged part of its Pearl gas-to-liquids facility in Qatar—the site converts natural gas into fuels for transport—and executives have flagged that the fighting could begin to crimp European fuel flows as soon as April. Higher prices provide a boost, sure, but disruptions—lost output, shipments forced onto new routes, repair costs—eat into those gains. Reuters
Australia’s supply outlook hasn’t settled into any clear trend. The Australian Energy Market Operator last week pushed its forecast for potential extreme peak-day shortfalls in the southern states out to 2030, citing better supply and softer demand. Still, AEMO executive Nicola Falcon called the improvement only “slight,” warning that timely delivery of new gas fields, storage, and pipelines will be critical from 2030 forward. AEMO
This is exactly why Australia holds such weight for Shell. The company—currently the world’s largest LNG trader—said this month that global LNG demand could jump between 54% and 68% by 2040, with the bulk of that increase coming from Asia. Treasury is reviewing tax possibilities now, and Canberra is due to lay out a separate gas reservation policy before year-end. Reuters
The fight shifts out of the boardrooms and into the hands of Treasury staff. April 8 is circled—Shell will detail how the conflict has hit its finances in the upcoming quarterly update. Reuters
