09/04/2026

BIZ & FINANCE THURSDAY | APR 9, 2026

17

Crude prices plunge while global stocks surge

Shell flags hit to Q1 gas output, capital outflow LONDON: Shell yesterday gave an early glance into the whiplash effect of the US-Israeli war on Iran on oil majors’ earnings, cutting its first-quarter gas production outlook while signalling a surge in oil trading profit and a dent to short-term liquidity. Global benchmark Brent crude oil prices jumped in the first quarter to multi-year highs near US$120 per barrel after the strikes on Iran in late February followed by Iran shutting the Strait of Hormuz and attacking its Gulf neighbours. Shell’s working capital, a measure of short-term liquidity, is expected to swing to between minus US$10 billion and minus US$15 billion, reflecting unprecedented commodity price volatility hitting inventory, it said in a quarterly trading update. The British oil major expects working capital moves to reverse over time if oil and gas prices decline. “Shell is expected to report a monster working capital build of US$10-15 billion, highlighting how unprecedented the current commodity price environment is,” said a note from RBC Capital Markets. “Given its strong balance sheet, we expect investors to look through this.” Trading results in its chemicals and products business, which includes Shell’s oil trading desk, are expected to be “significantly higher” than in the previous quarter, similar to adjusted earnings in its marketing arm, which includes petrol stations. Shell’s first-quarter integrated gas production was expected to be about 880,000 to 920,000 barrels of oil equivalent per day, the company said. It previously expected 920,000 to 980,000 boed. In the fourth quarter of 2025, it produced 948,000 boed. Shell’s first-quarter LNG production was expected to be about 7.6 million to 8 million metric tons, the company said, adding that the figure reflected the ramp-up of LNG Canada but was offset by weather constraints in Australia and Qatar LNG outages. It previously forecast 7.4 million to 8 million tons. In the fourth quarter of 2025, it liquefied 7.8 million tons. Production at Shell’s Pearl gas-to-liquids facility in Qatar stopped in mid-March after an attack on the Ras Laffan Industrial City damaged the facility, Shell said at the time. Pearl GTL, a two-train facility that can process up to 1.6 billion cubic feet per day of wellhead gas, converting it into 140,000 bpd of gas-to-liquids, sustained damage on one the trains in the attacks, Shell has said. Full repair of its train two would take around a year, Shell said at the time. Net debt on a non-cash basis is expected to increase by US$3 billion to US$4 billion due to variable components of long-term shipping leases in the current macro environment. Shell’s net debt for the fourth quarter 2025 was US$45.7 billion, and its gearing, or debt-to-equity ratio including leases, stood at 17.7%, below the 20% level Shell previously described as “comfortable.” Shell forecast adjusted earnings for its renewables and energy solutions unit to be around US$200 million to US$700 million, from US$131 million in the fourth quarter, and trading in the unit to be significantly higher. Brent crude prices averaged around US$78.38 a barrel over January to March, compared with US$63.08 in the fourth quarter and US$74.98 a barrel during the same time last year. – Reuters

HONG KONG: Oil prices plunged yesterday while stocks soared after the United States and Iran agreed to a two-week ceasefire that will see Tehran temporarily reopen the vital Strait of Hormuz. With Donald Trump’s deadline approaching for Iran to reopen the waterway or face obliteration, he announced a halt to attacks for two weeks and said he had received a “workable” 10-point proposal. Iran later said it had agreed to safe passage in the Strait, through which a fifth of global oil and gas passes. The news pushed down crude prices, with West Texas Intermediate losing almost 20% and Brent as much as 16% as investors heaved a huge sigh of relief after more than five weeks of war that has hammered supplies. The euphoria sent global equities rocketing on hopes the crisis that has shocked the global economy for more than a month will come to an end. Seoul jumped 6.9% and Tokyo 5.4%, while Taipei added more than 4% and Mumbai 3.8%. Hong Kong advanced more than 3%, while Sydney, Shanghai, Bangkok, Manila, Jakarta, Singapore and Wellington were also sharply higher. London, Paris and Frankfurt extended the global rally, while US futures soared. Middle East stocks also rallied, with Dubai jumping 8.5%, the biggest intraday increase since December 2014, according to Bloomberg. Stocks in Abu Dhabi climbed more than 3%, which was the largest gain since March of the same year. Trump had threatened on Tuesday that if Hormuz was not reopened, “a whole civilisation will die tonight, never to be brought back again”. That came after he vowed to bomb bridges, power plants and other civilian infrastructure in Iran. Iran warned it would deprive the United States and its allies of oil and gas “for years” if he did so. However, as the world counted down to the cutoff, the US president took to social media to say: “Subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.” He added that it “will be a double sided o US and Iran agree to two-week ceasefire that will reopen Strait of Hormuz

Storage tanks are seen at an oil refinery as Mount Fuji looms in the background in the Japan city of Yokohama yesterday. – AFPPIC

Gold rallied, having been hit by concerns of a sharp rise in inflation that will keep interest rates elevated, while bitcoin rose. “Trump and the Iranians have confirmed that various proposals have been exchanged which will now form the basis of negotiations towards a longer-lasting peace agreement, which will be ‘finalised and consummated’ over the coming fortnight,” said Michael Brown at Pepperstone. “This latter aspect helps to explain the significant risk-on market reaction that we’ve seen,” he added. “Not only are participants pricing out the risk of near-term escalation, but they must also price in the increased likelihood that we do now see a durable, and long-lasting agreement formed to bring hostilities to an end.” Stephen Innes of SPI Asset Management said the deal “matters enormously for Asia”, where several governments have been forced to introduce measures to combat rising energy costs. “Lower oil prices remove the chokehold that has weighed on regional risk sentiment, especially in markets that feel imported energy shocks first and hardest,” he said. “With crude backing off, the pressure on inflation expectations and front-end yields eases at the margin, and that is enough to let capital rotate back toward risk, at least for now.” – AFP

Oil prices plunged yesterday after the United States and Iran agreed to a two-week ceasefire that will see Tehran temporarily reopen the Strait of Hormuz. The ceasefire was agreed barely an hour before US President Donald Trump’s Wednesday deadline threat to obliterate Iran was set to expire. Tehran later said it had agreed to safe passage in the Strait of Hormuz, through which a fifth of global oil and gas passes. “Even if you have the flow of crude start again, if you’ve had disruptions in refining capacity, then the problem continues for some time,”Walsh said. CEASEFIRE!” and that “we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East”. He later said on Truth Social that the United States would help with the traffic buildup in the Strait of Hormuz, adding: “There will be lots of positive action! Big money will be made. Iran can start the reconstruction process.” Prime Minister Shehbaz Sharif of Pakistan, which has played a key mediator role, said the ceasefire would start immediately. He said the United States “along with their allies” had agreed to a ceasefire everywhere including Lebanon, implying that Israel had agreed to halt its invasion of its northern neighbour. However, Tel Aviv said it supported the suspension of the bombing of Iran, but maintained the ceasefire did not include Lebanon. Iran claimed victory, with the Iranian Supreme National Security Council saying: “The enemy has suffered an undeniable, historic and crushing defeat in its cowardly, illegal and criminal war against the Iranian nation.” The ceasefire also led to a sharp drop in the dollar, which had become the safe-haven while the war raged, with the yen, euro and pound all strengthening.

Jet fuel supplies to take ‘months’ to recover from war disruption: IATA SINGAPORE: It will take months for jet fuel supplies and prices to normalise even with the Strait of Hormuz open, the head of the International Air Transport Association (IATA) said yesterday. “I don’t think it’s going to happen in weeks,“ Walsh added. “I don’t think everybody fully appreciated how concentrated the capacity was in certain parts of the world,“ he added.

Past experience shows that the aviation industry will respond to higher oil prices by raising ticket prices, he said. “It’s inevitable.” While some air traffic that would have passed through the Middle East has gone to airlines outside the region, this is “a temporary issue”, Walsh said. “There’s no way they can replace the capacity that was provided by the Gulf carriers,“ he added. “I think the Gulf hubs will recover and recover very quickly.” – AFP

The Strait of Hormuz, a vital shipping route for oil, has been virtually paralysed for weeks by the Middle East war, pushing up prices for crude and related products. IATA director-general Willie Walsh told reporters in Singapore it was difficult to say how long fuel supplies would take to recover, but “it’s not going to happen quickly”. “It will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East,” he said.