Jennifer Meierhans and
Shanaz Musafer, Business reporters
Shell Plc reported a sharp rise in second-quarter earnings after heightened geopolitical tensions in the Middle East sent crude oil prices soaring and boosted trading opportunities, underscoring how volatility in global energy markets continues to reshape the fortunes of the world’s largest energy companies.
The energy major posted second-quarter profits of $9.84 billion for the April-to-June period, more than doubling from $4.26 billion recorded in the corresponding quarter of last year, driven by stronger oil prices, robust energy trading and resilient operational performance despite disruptions to parts of its liquefied natural gas (LNG) business.
According BCC report, the latest earnings bring Shell’s first-half 2026 profit to $16.76 billion, representing a 70% increase compared with the same period a year earlier.
Middle East Conflict Boosts Oil Prices and Trading Revenue
Shell’s improved financial performance comes amid heightened volatility in global energy markets following the escalation of hostilities involving Iran, Israel and the United States, which disrupted oil and LNG flows through the strategically important Strait of Hormuz.
The geopolitical crisis pushed Brent crude, the international oil benchmark, from around $73 per barrel before the conflict to above $120 per barrel at its peak before retreating below $100 as markets reacted to uncertainty over regional supply routes.
The sharp swings created favourable conditions for commodity traders, allowing integrated energy companies such as Shell to benefit from wider trading margins in crude oil, refined products and LNG.
Shell Chief Executive Wael Sawan said the company delivered a strong operational and financial performance despite exceptionally volatile market conditions.
“Our operational performance enabled very strong results during another quarter of severe disruption in global energy markets,” Sawan said.
LNG Operations Hit by Regional Disruptions
While higher commodity prices lifted earnings, the conflict also disrupted parts of Shell’s upstream gas business.
The company said LNG production in Qatar remained suspended during the period due to the regional conflict, while its Pearl Gas-to-Liquids (GTL) facility sustained extensive damage following a missile strike earlier in the year. Shell expects repairs to the facility to take approximately one year.
As a result, Shell’s gas production declined to 631,000 barrels of oil equivalent per day (boe/d) during the second quarter from 909,000 boe/d in the first quarter.
Overall, the company’s combined oil and gas production during the first half of 2026 fell 16% compared with the same period in 2025.
However, Shell partly offset the decline through increased production from new projects in Brazil and the Gulf of Mexico, supporting overall upstream performance.
Trading Business Underpins Earnings Growth
Energy analysts said Shell’s integrated business model enabled the company to capitalize on extreme market volatility.
Maurizio Carulli, Global Energy Analyst at Quilter Cheviot, said the company’s trading division once again proved to be one of its strongest competitive advantages.
“The standout contribution came from Shell’s trading operation, which demonstrated the value of its integrated business model, supported by healthy refining and chemicals performance alongside robust production growth in Brazil,” he said.
Analysts noted that companies with sophisticated trading operations typically outperform during periods of heightened geopolitical uncertainty because rapid price movements create opportunities across physical and financial energy markets.
Energy Majors Continue to Benefit from Volatile Markets
Shell joins other global energy giants, including BP and Equinor, in reporting stronger earnings this year as geopolitical instability continues to tighten global oil supplies and increase commodity price volatility.
Although crude prices have eased from their peak levels, analysts expect geopolitical risks in the Middle East to remain a key driver of oil market sentiment in the months ahead.
Climate Groups Renew Criticism
The strong earnings also renewed criticism from environmental organisations, which argued that major oil companies continue to benefit financially from crises that have increased energy costs for consumers.
Friends of the Earth said the profits highlight continued dependence on fossil fuels at a time when many households are grappling with elevated electricity, heating and transport fuel costs.
The campaign group urged governments to accelerate investments in renewable energy and reduce reliance on oil and natural gas to improve long-term energy security while addressing climate change.
Why It Matters
Shell’s latest earnings demonstrate how geopolitical instability can simultaneously disrupt energy production while significantly boosting profitability for integrated oil majors through higher commodity prices and trading gains. For investors, the results reinforce the value of diversified energy portfolios with strong trading capabilities. For governments and businesses, they also underscore the continued vulnerability of global energy markets to supply disruptions in the Middle East, particularly around the Strait of Hormuz, a critical artery for global oil and LNG exports.