Shell NYSE:SHEL, the London-based energy giant with major oil, gas and trading operations, appears to have benefited from the sharp volatility created by the Iran war, with the company saying its second-quarter oil trading result stayed in line with a strong first quarter while gas trading was significantly higher. The update gives investors an early look at how Shell's trading desks may have helped support earnings in a quarter marked by major disruption across oil and gas supply.
The market backdrop was unusually volatile, with Brent crude rising above $126 a barrel at the end of April before falling more than 40% to around $72 since the end of June as Persian Gulf producers increased flows through the Strait of Hormuz. Shell's natural gas production was pressured by offline output in Qatar, which accounts for about 10% of the company's global oil and gas volumes, but the company now expects a slightly higher second-quarter natural gas production range than previously guided because of its broader global portfolio.
Investors appeared to respond positively, with Shell shares rising as much as 2.7% in London trading on Tuesday. Barclays analyst Lydia Rainforth said the strong trading result was offsetting weaker performance from the Qatar disruption, while Shell also reported improved refining and chemicals margins as the sector worked to process fuels such as jet and diesel amid Middle East disruptions.