Shell Posts $6.9 Billion Profit as Iran War Reshapes Global Energy Markets

Oil giant Shell posted bumper profit of $6.92 billion through the first quarter as the Iran war sent fossil fuel prices soaring , the company announced Thursday. The results were higher than analysts had expected and up from $5.58 billion in the same period a year earlier , marking a 24% year-over-year increase driven largely by volatile energy markets.

Shell chief executive Wael Sawan said the company "delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets" . The earnings windfall came despite operational setbacks— a 4% fall in total oil and gas production, to 2.75 million barrels of oil equivalent per day, primarily due to damage to Shell's facilities in Qatar .

According to market data, Brent Crude traded at $75.20 per barrel on Wednesday, up 0.5% from the previous session, while WTI Crude stood at $71.50 per barrel, up 0.6%. These figures reflect a dramatic retreat from the crisis peaks— oil has seen sharp swings, peaking above $120 at one point, but also falling below $100 on other occasions as speculation has swirled over when the Strait of Hormuz will reopen .

Record U.S. Exports Drain Domestic Fuel Supplies

While oil majors celebrate windfall profits, American consumers face a different reality. US oil product exports surged to a record 8.2 million barrels per day last week as countries scrambled to replace fuel supplies disrupted by the Hormuz crisis, according to Bloomberg reporting, which noted that diesel exports led the increase and reached an all-time high .

The export boom has created a paradox: America is now the world's top oil exporter, yet domestic fuel supplies are dwindling rapidly. MarketWatch reported that diesel supplies sink to about a 20-year low as prices jump to $5.67 a gallon nationally—and it isn't yet peak summer travel . Stockpiles are 11% below their five-year average , according to CNN.

Jet fuel shortages threaten to disrupt summer travel as the loss of supplies from the Middle East ripples across Asia and Europe. Exports from the Persian Gulf represented the largest single source of jet fuel supply to the global market before the U.S. and Israel attacked Iran on Feb. 28, according to the International Energy Agency . The European Union will face a "systemic jet fuel shortage" if the Strait of Hormuz does not reopen, the trade group Airports Council International Europe warned the 27-nation economic union in an April 9 letter .

Asia Faces Plastics Crisis as Naphtha Supplies Evaporate

The energy disruption is triggering cascading shortages across Asia's manufacturing sector. The Financial Times reported that 'Plastic shock' hits Asia as Iran oil crisis strangles supplies , with the region facing acute shortages of naphtha, a critical petrochemical feedstock.

As a result of the supply squeeze, the price of the feedstock has doubled in Asia, leading to higher prices for a wide variety of products, contributing to already worrying inflation trends in Asia , according to OilPrice.com. The crisis, driven by a tightening supply of naphtha—a critical petrochemical feedstock—has already forced factories to scale back production and raised alarm across multiple industries dependent on plastic packaging. The strain stems from a severe disruption in Middle East oil shipments, which has sharply reduced global availability of naphtha, a petroleum derivative used both in semiconductor-related chemicals and in the production of plastics such as polyethylene and polypropylene .

Several major petrochemical firms, including Chandra Asri, have reportedly declared force majeure due to raw material shortages, while Japanese chemical producers such as Mitsubishi Chemical Group and Mitsui Chemicals have reduced output . Fortune noted that the region imports around 70% of its supply of naphtha, a petrochemical feedstock used to produce polymers like polyethylene (PE) and polyethylene terephthalate (PET), from the Middle East .

Oil Markets Whipsaw on Diplomatic Signals

Oil prices have become a barometer for geopolitical hope and despair. Oil prices fell Thursday in volatile trading as investors continue to assess the latest developments in the Middle East amid concerns over renewed tensions between Iran and the U.S. International benchmark Brent crude futures for July fell 1.85% to $99.40 a barrel , CNBC reported.

The volatility stems from conflicting signals about a potential U.S.-Iran agreement. The price of oil plunged and stocks surged Wednesday after a report said the U.S. believed it was nearing a deal to end the war with Iran and eventually reopen the Strait of Hormuz , according to NBC News. However, previous efforts to reach a deal have fallen short .

"A deal that normalises oil flows through the Strait of Hormuz is crucial," Warren Patterson, head of commodities strategy at Dutch bank ING, said in a research note. "Roughly 13 mb/d of disrupted supply is being largely offset by inventory, which is clearly declining rapidly. This leaves the market more vulnerable with each passing day. Tighter stocks will only leave the oil market trading in an ever more volatile manner," he added .

The International Energy Agency has characterized the situation as "the largest supply disruption in the history of the global oil market" , with the head of the IEA describing the situation caused by the war as the "greatest global energy security challenge in history" .

Natural gas markets showed relative stability, with Henry Hub Natural Gas trading at $3.25/MMBtu according to market data, down 2.4% as traders awaited government inventory reports. Natural Gas Intel reported that natural gas futures traders braced early Thursday for a potentially bullish government inventory report .

The energy crisis continues to reshape global supply chains and consumer costs, with no clear resolution in sight as diplomatic efforts remain uncertain.