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Shell cuts gas production outlook due to Iran war
By Frank Prenesti
Date: Wednesday 08 Apr 2026
(Sharecast News) - Energy giant Shell on Wednesday cut its forecast for integrated gas production, reflecting the impact of the Iran war on Qatari volumes.
However it added that the trading result at its chemicals and products unit, which also includes refined oil, along with its marketing arm, was expected to be "significantly higher" compared with the final quarter of 2025.
First-quarter production at Shell's integrated gas segment is now expected to range from 880,000 to 920,000 barrels of oil equivalent a day, compared with prior guidance of between 920,000 and 980,000 boe.
Trading at the renewables and energy solutions business was also forecast to be significantly higher than the fourth quarter, with adjusted earnings expected to come in at $200m - $700m compared with $100m in the fourth quarter.
Crude oil prices neared $120 a barrel after the US and Israel launched their war of choice against Iran at the end of February. The conflict has caused the effective blockade of the key Strait of Hormuz, through which a fifth of the world's oil travels.
Prices plunged on Wednesday to around $94 a barrel after the warring parties agreed a two-week truce. Oil infrastructure in neighbouring Gulf states has been damaged by Iranian drones and missiles over the last five weeks which is expected to impact on shipments assuming the fragile ceasefire holds.
First-quarter LNG production was expected to be about 7.6 million to 8 million metric tonnes compared with a previous forecast of 7.4 million to 8 million tonnes. This reflected the ramp-up of Canada operations offset by weather constraints in Australia and the Qatar LNG outages.
Production at Shell's key Pearl gas-to-liquids facility in Qatar was halted last month after an Iranian projectile hit the facility.
Shell also said the impact of unprecedented volatility in commodity prices on inventory would lead to a working-capital outflow of $10bn - $15bn in the first quarter, compared with a positive $1.3bn in the previous three months.
"While the big increase in energy prices should boost Shell's profit, the company also has a significant operational footprint in the Middle East which has been disrupted by the fighting," said AJ Bell analyst Dan Coatsworth.
"This dichotomy is reflected in Shell's latest update. Inevitably, Shell's shares have slipped lower this morning as markets react to news of a ceasefire between the US and Iran. The net result of this outcome being that oil and gas prices are falling, albeit they are still materially higher than pre-war levels."
"The sheer volatility in commodity markets is reflected in wild swings in Shell's working capital and, for all the benefit the company might enjoy from elevated energy markets, it comes with complications and headaches too."
"Chief executive Wael Sawan has won praise for the discipline injected into Shell's business model, but his next job is working out how to replenish a reserve base which has been diminished by disposals and reduced spending."
Reporting by Frank Prenesti for Sharecast.com
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