Shell’s Hormuz Headache: 900 Million Barrels Lost as Trading Profits Mask Production Pain
Published on 04/30/2026 at 05:01 | Redaktion boerse-global.de
The numbers coming out of Shell’s first quarter tell two sharply different stories. On one side, the trading desk is raking in cash from the wildest oil market swings in years. On the other, production is taking hits from both geopolitical turmoil and direct attacks on infrastructure. The result is an energy giant navigating a landscape where record profits and operational setbacks coexist uneasily.
A Blockade That Won’t Quit
Since hostilities erupted in the Strait of Hormuz, roughly 900 million barrels of oil have been locked out of global markets. Brent crude surged more than 7% to nearly $120 a barrel — the highest level since 2022. Goldman Sachs analysts estimate the world’s oil inventories are now being drawn down at a record pace of 11 to 12 million barrels per day.
The diplomatic front offers little relief. Washington recently turned down an Iranian proposal to lift the naval blockade, citing the absence of a new nuclear agreement. At an April 29 meeting with top energy executives — including representatives from Chevron — Shell CEO Wael Sawan discussed the possibility that the blockade could drag on for several more months. His broader warning: oil and LNG shortages may persist through 2027.
Qatar’s Blow to Output
While the trading division benefits from volatility, Shell’s physical production is taking a direct hit. A March attack on industrial facilities at Qatar’s Ras Laffan complex forced the shutdown of a key gas-to-liquids plant. That has pushed expected output in the Integrated Gas segment down to between 880,000 and 920,000 barrels of oil equivalent per day for the first quarter — a notable drop from 948,000 in the previous quarter.
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The Strait of Hormus closure compounds the problem. The waterway normally handles about a fifth of global oil trade, and the March supply disruption exceeded 10 million barrels per day. Goldman Sachs has raised its Brent forecast to $90 a barrel, anticipating sustained price pressure.
A $22 Billion Canadian Bet
In response to these supply-chain vulnerabilities, Shell has been bulking up in politically stable regions. The $16.4 billion acquisition of ARC Resources — a deal Sawan says was two years in the making — gives the company low-cost production in Canada’s Montney formation and strengthens its LNG export terminal in the country. The transaction is valued at $22 billion and is expected to close in the second half of the year.
Operationally, Shell also dealt with a fire at its Norco, Louisiana chemical plant on April 28, though the blaze has since been extinguished without major lasting damage.
Analyst Confidence Meets Technical Warning
Despite the production setbacks, analysts remain bullish. Barclays and Jefferies both reiterated buy ratings on Shell shares on April 28 and 29, pointing to the company’s strong cash generation in the current high-price environment. That confidence is notable given that Shell reported full-year 2025 profit of $18.5 billion — a 22% decline from the prior year, when oil prices were significantly lower.
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The stock trades at around €38, up nearly 18% year-to-date. But with a relative strength index near 77, the shares are flashing overbought signals. A pullback toward the 50-day moving average of €37.66 would not surprise chart watchers. The wild card remains the Strait of Hormuz: any de-escalation would quickly deflate oil prices and the valuation premium Shell currently enjoys.
What’s Next
Shell is expected to release its final first-quarter results on May 7. Management will need to explain an anticipated working capital outflow of up to $15 billion. Still, market observers expect the company to announce a new share buyback program, as the current tranche is likely to be exhausted by May. The question hanging over the stock is whether trading profits can continue to offset the production pain — and how long the geopolitical premium will last.
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