BP & Shell Post Record Q1 Trading Profits Fueled by Iran War

Soaring oil prices triggered by the Iran war have driven British energy majors BP and SHEL to record-high crude trading profits in Q1.

BP disclosed in its Q1 trading update on the 14th (local time) that performance in its crude trading division was "exceptional" — a sharp reversal from the weak trading results posted in Q4. Bloomberg reported that "the Iran war has upended global energy markets, delivering a windfall for BP's trading operations."

Brent Crude Surges Over 60% Year-to-Date

The dramatic earnings recovery was driven by the Iran conflict. The hostilities, which began on February 28 with a joint U.S.-Israeli airstrike campaign dubbed 'Operation Epic Fury,' effectively paralyzed commercial shipping through the Strait of Hormuz. Iran retaliated by striking key energy infrastructure across the Persian Gulf region.

As a result, Brent crude surged more than 60% year-to-date, trading at approximately $96 per barrel as of April 17. BP's average realized Brent price in Q1 came in at $81.13 per barrel, up 27% from the prior quarter ($63.73).

Shell Also Reports 'Significantly Higher' Trading Profits

SHEL reported a similar trajectory. In its Q1 pre-close trading update on April 8, SHEL guided that adjusted earnings from its marketing and crude trading segment would be "significantly higher." Refining margins also improved, rising from $14 to $17 per barrel, while chemical plant utilization climbed from 76% to 81–85%. Earnings from the renewables segment surged from $100 million to as much as $700 million.

However, upstream production came in slightly below the prior quarter (1.94 million boe/day) as Middle East tensions disrupted output in Qatar and other producing regions. Non-cash net debt is also expected to rise by $3–4 billion due to higher lease costs associated with increased long-haul shipping routes.

BP Net Debt Rises Ahead of Earnings Release

BP flagged that end-of-Q1 net debt is expected to expand to $25–27 billion, driven by higher working capital requirements stemming from elevated oil prices. That represents an increase of up to $5 billion or more compared to end-Q4 ($22.2 billion), as the oil price spike significantly amplified cash settlement demands in physical trading.

BP's official Q1 earnings will be released on April 28, with SHEL reporting on May 7. Markets are closely watching how both companies will guide on trading profitability beyond Q2, given that oil prices have since pulled back to around $84 per barrel following progress in negotiations to reopen the Strait of Hormuz.

📊 Related Stocks & ETFs

🛢 Global Oil Majors

· BP plc (NYSE: BP)
· Shell plc (NYSE: SHEL)
· Exxon Mobil (NYSE: XOM)
· Chevron (NYSE: CVX)
· TotalEnergies (NYSE: TTE)
· ConocoPhillips (NYSE: COP)

⚙️ Refining & Trading Plays

· Marathon Petroleum (NYSE: MPC)
· Valero Energy (NYSE: VLO)
· Phillips 66 (NYSE: PSX)

📈 ETFs

· Energy Select Sector SPDR (NYSE: XLE) — Benchmark energy sector ETF
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· VanEck Oil Services (NYSE: OIH)
· Fidelity MSCI Energy Index (NYSE: FENY)