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Shell PLC on Wednesday said output in its first quarter was dented by the conflict in the Middle East, though refining margins increased, while a slump in the oil price put its shares under pressure. In a trading update, the London-based oil major said it expects to report Integrated Gas output in the range of 880,000 to 920,000 barrels of oil equivalent per day for the first quarter, easing from 948,000 in the fourth quarter of 2025. This reflects the impact of the Middle East conflict on Qatari volumes, the FTSE 100 listing said, and was below prior guidance for 920,000 and 980,000 boepd. Liquefied natural gas volume guidance for the quarter was nudged up to between 7.6 to 8.0 million tonnes from prior guidance of 7.4mt to 8.0mt. In the fourth quarter, LNG volumes totalled 7.8mt. This reflects the ramp-up of LNG Canada, offset by Australia weather constraints and Qatar LNG outages, Shell said. Shell stressed that in ‘light of the ongoing situation in the Middle East, the outlook provided is subject to increased uncertainty.’ Shell said non-cash net-debt is expected to be impacted by $3 billion to $4 billion increase in ‘variable components of long-term shipping leases in the current macro environment’. Working capital is expected to swing to a negative $10 million to $15 million in the first quarter of 2026 compared to positive $1.3 billion in the prior quarter. This reflects the impact of ‘unprecedented volatility in commodity prices on inventory and receivables,’ Shell said. Upstream production between 1.76 and 1.86 million boepd is expected, easing from 1.89 million in the fourth quarter. It had previously predicted Upstream output of 1.70 million to 1.90 million boepd. This includes reduced production following the Adura joint venture incorporation. Shell puts its indicative refining margin in the Chemicals & Products segment at $17 a barrel for the first quarter, up from $14 in the prior three months. It said ‘trading & optimisation is expected to be significantly higher’ than the fourth quarter. Marketing adjusted earnings are expected to be significantly higher on-year, Shell said. In Renewables and Energy Solutions, Shell expects trading and optimisation to be ‘significantly’ higher than the prior quarter. Shares in the London-based oil major were down 6.8% at 3,324.50 pence each in London on Wednesday morning. Brent crude was trading at $94.58 per barrel in London on Wednesday morning, down sharply from $110.24 at the time of the equities close in London on Tuesday after the US and Iran agreed a two-week ceasefire. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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