Shell reduces Q1 production forecast after Qatar disruptions citing conflict with Iran

Shell cut its first-quarter outlook for its integrated gas production on Wednesday to reflect the impact of the 'Middle East conflict' on Qatar.

Shell said that its trading results, which include its oil trading desk in its chemicals and products division, will be "significantly" higher than the previous quarter. This is similar to the adjusted earnings of its marketing arm.

Brent crude oil prices, which are the global benchmarks, soared to multi-year heights in the first quarter, near $120 per barrel. This was after the U.S. attacked Iran late in February and Iran responded by attacking its Gulf neighbors and effectively closing the Strait of Hormuz.

The conflict is expected to bring in multi-billion dollar profits for Big Oil due to the soaring energy prices.

Q1 GAS OUTPUT IS EXPECTED TO BE 880,000-920,000 BOED

Shell said that it expects its first-quarter integrated production to be between 880,000 and 920,000 barrels equivalents per day. It had previously predicted 920,000 to 980,000 barrels of oil equivalent per day. In the fourth quarter 2025, they produced 948,000 Boed.

Shell said that its first-quarter LNG output was expected to range between 7.6 and 8 million tons. The company added that this figure was a result of the increased production at LNG Canada, but it was also affected by the weather in Australia, as well as the outages caused by Qatar LNG. It had previously predicted 7.4 to 8 million tonnes. It liquefied 7,8 million tons in the fourth quarter of 2025.

Shell reported that production at Shell's Pearl Gas-to-Liquids facility in Qatar ceased in mid-March following an attack on Ras Laffan industrial City.

Shell has confirmed that Pearl GTL is a two train facility capable of processing?upto 1.6 billion cubic feet of wellhead gas per day, and converting it to 140,000 bpd gas-to liquids. One of the trains was damaged in the attack.

Shell said that the full repair of train 2 would take about a year.

WORKING CAPITAL TO REFLECT UNPRECEDENTED PRICE SWINGS

Shell's Working Capital, a measure of short-term liquidity accounting based on current assets less liabilities, will?swing from minus $15 billion to about $10 billion. Shell explained that this reflects the impact on inventories of an unprecedented level of?volatility' in commodity prices.

The global benchmark Brent crude price averaged $78.38 per barrel in the January-March quarter. This compares to $63.08 a barrel for the fourth quarter of last year and $74.98 during the same period. (Reporting and editing by Bernadettebaum Baum, Shadia Nasralla and Stephanie Kelly)

(source: Reuters)