Shell Set for Record Trading Quarter as Iran War Whipsaws Oil and Gas
Extreme price swings from the Iran war have handed European majors with large trading desks a windfall their US rivals cannot match.
Shell is heading into one of its strongest oil and gas trading quarters in years, the payoff from the violent price swings the Iran war has produced since late February.6
The reason is structural to the business model. European firms such as Shell and BP run large proprietary trading books that monetise volatility, while US rivals ExxonMobil and Chevron lean more heavily on physical production and have captured less of the same market.6
The raw material for those desks has been abundant. ICE Brent crude front-month surged more than 55% after the war began, climbing from around $72 a barrel on February 27 to a peak near $120.4 By 2026-07-11 it had settled back to $75.22, with most of the war-risk premium drained out. [live_prices]
Exchange data show the scale of the churn. The EEX said on Wednesday (2026-05-20) that European gas derivatives volumes jumped 62% in the first quarter, with 1,721 TWh changing hands as markets braced for and reacted to the conflict.1 Power derivatives volumes rose 29% to 3,238 TWh over the same window, while spot gas trade climbed 9% to 972 TWh, the exchange said, calling the spikes "extraordinary".1
Cleared exchange figures capture only part of the flow. Bilateral over-the-counter trading, where Shell and BP are most active, likely expanded further, traders said.1
The path of prices has punished anyone betting on direction. In the week ending Friday (2026-05-08), oil was heading for a 7% weekly loss as traders struggled to price the odds of a US-Iran settlement against continued Middle East attacks.5 On Thursday (2026-05-14), crude briefly spiked before reversing lower after Israel said it was helping reopen the Strait of Hormuz passageway.3
European gas felt the same shock. The ICE Endex TTF front-month traded up more than 11% on Thursday (2026-05-14), to around €61 per MWh, as desks priced supply-disruption risk feeding through to LNG flows.3 US markets barely moved: NYMEX Henry Hub front-month gained 1.7% to $3.116 per MMBtu, insulated from Middle East supply routes.3
Policymakers have leaned against the physical squeeze. IEA member countries agreed to release 400 million barrels of strategic stocks, and executive director Fatih Birol signalled the agency was ready to act again. "Four hundred million barrels is only 20% of our resource," he said. "We have still 80% in our pocket."2
The acute fear that gripped refiners is fading. European spot premiums for jet fuel have dropped to their lowest since the conflict began, according to Argus, to a $99 per tonne premium over ICE gasoil futures.5
For Shell's desks, the question is whether trading volumes held into the second quarter or collapsed toward pre-war levels as the premium drained. EEX's next volume report will show which.1