Shell Forecasts Higher Q1 Trading Profits, Warns of 3-7% Gas Output Drop
Shell expects significantly higher Q1 trading and marketing earnings driven by Middle East volatility and oil price swings, while production faces headwinds. First-quarter natural gas output is forecast at 880,000-920,000 boe/d, down from 948,000 boe/d, with LNG liquefaction volumes of 7.6-8.0 million tons due to Qatar outages and weather constraints.
1. Trading Profit Expectations
Shell’s Q1 trading and marketing divisions are projected to deliver significantly higher adjusted earnings compared with both Q1 2025 and Q4 2025, as heightened price swings in oil and energy markets create more arbitrage opportunities for its global trading network.
2. Production and LNG Forecasts
The company foresees natural gas production of 880,000-920,000 barrels oil equivalent per day, down from 948,000 boe/d in the prior quarter, and LNG liquefaction volumes of 7.6-8.0 million tons versus 7.8 million tons, reflecting outages at Qatar facilities and weather-related disruptions in Australia.
3. Geopolitical and Operational Headwinds
Disruptions in the Strait of Hormuz following regional conflict have damaged Qatari infrastructure, potentially requiring up to a year for full repair, while weather constraints in Australia further tighten physical supply even as Shell’s trading desks capitalize on market chaos.