Shell cuts gas production outlook due to Iran war

(Sharecast News) - Energy giant Shell on Wednesday cut its forecast for integrated gas production, reflecting the impact of the Iran war on Qatari volumes. However it added that the trading result at its chemicals and products unit, which also includes refined oil, along with its marketing arm, was expected to be "significantly higher" compared with the final quarter of 2025.

First-quarter production at Shell's integrated gas segment is now expected to range from 880,000 to 920,000 barrels of oil equivalent a day, compared with prior guidance of between 920,000 and 980,000 boe.

Trading at the renewables and energy solutions business was also forecast to be significantly higher than the fourth quarter, with adjusted earnings expected to come in at $200m - $700m compared with $100m in the fourth quarter.

Crude oil prices neared $120 a barrel after the US and Israel launched their war of choice against Iran at the end of February. The conflict has caused the effective blockade of the key Strait of Hormuz, through which a fifth of the world's oil travels.

Oil infrastructure in neighbouring Gulf states has also been hit by Iranian drones and missiles which is expected to impact on shipments assuming the fragile two-week ceasefire agreed on Tuesday night between the warring nations holds.

First-quarter LNG production was expected to be about 7.6 million to 8 million metric tonnes compared with a previous forecast of 7.4 million to 8 million tonnes. This reflected the ramp-up of Canada operations offset by weather constraints in Australia and the Qatar LNG outages.

Production at Shell's key Pearl gas-to-liquids facility in Qatar was halted last month after an Iranian projectile hit the facility.

Reporting by Frank Prenesti for Sharecast.com

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