# Shell under fire over ‘outrageous’ profits after boost from soaring oil prices

By Derren Nathan — 2026-05-07

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Shell’s first quarter underlying earnings came in nearly $1billion ahead of forecasts against a backdrop of unprecedented disruption in energy markets.

“Its trading and optimisation activities contributed strongly but improved refining margins, cost discipline and higher prices all played their part.

“Free cash flow moved in the other direction, falling $1.3billion from the previous quarter to $2.9billion as the higher price environment locked up more cash in stock and sums receivable from customers.

“The immediate outlook for integrated gas has been impacted by damage to Shell’s facilities in Qatar.

“The proposed acquisition of ARC resources for $16.4billion goes some way towards diversifying supply, but with net debt up 27 per cent over the last year to $52.6billion, management has slowed the pace of share buybacks slightly.

“Overall, Shell is benefiting from the higher energy price environment, and even if the Strait of Hormuz does reopen, we don’t think prices are unlikely to go back to pre-war levels.

“However, balance sheet strength and resilient shareholder distributions have been a key attraction for investors, so it’s understandable markets have reacted a little cautiously today.”

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