Equinor: trading profits to top guidance partly due to Iran war windfall

The Norwegian oil and gas company Equinor said that its downstream division, which includes trading in energy, will report stronger results for the first quarter of this year. This is partly due to the volatility caused by the Middle East war.

Equinor will report its first-quarter earnings to investors on May 6. Investors are interested in how tighter markets for gas and crude oil, and a revamped business structure affect earnings and cash flow.

BP and Shell, two European rivals, have said that the U.S./Israeli war on?Iran triggered the energy price fluctuations in the third quarter, which created a windfall to their trading operations.

Middle East War Driving 'Significant Volatility'

Equinor, in a Thursday quarterly update, reiterated that its Marketing, Midstream and Processing division is expected over time to report an 'average quarterly adjusted operating income of $400 million.

Equinor stated in a press release that it expects the results to exceed this guidance.

The company cited several reasons why it had higher MMP earnings.

The report said that the conflict in the Persian Gulf had caused significant volatility for crude, products and fluids at the end of the third quarter.

The company also claimed that its U.S. Gas Trading business had benefitted from price increases during a cold snap in late January.

The company did not elaborate on the fact that in Europe, "geographic spreads in the gas markets" were "not directly linked to the Middle East situation".

BP announced on Tuesday its oil trading desk is set?for 'exceptional' first-quarter results. Shell also reported strong oil trading as conflict involving Iran caused violent price swings, and redistributed crude and fuel flow.

The month of march was marked by a scramble to get non-Middle East crude after disruptions around the Strait of Hormuz pushed Brent crude above $100 per barrel, and increased premiums for crude shipped into Europe. (Reporting and editing by Essi Lahto and Joe Bavier; Reporting by Jesus Calero, Terje Solsvik)

(source: Reuters)