A New Era of Energy Volatility
The global energy market entered a new period of volatility following the outbreak of the war involving Iran on February 28. As geopolitical tensions intensified, the Strait of Hormuz – one of the world’s most important oil transit routes – faced major disruption.
According to the International Energy Agency (IEA), the conflict has become the “biggest energy security threat in history,” contributing to an approximately 40% surge in oil prices.
Against this backdrop, both traditional oil companies and renewable energy firms delivered strong first-quarter results, although for very different reasons.
Shell Benefits From Rising Oil Prices
Energy giant Shell opened the earnings season with results that exceeded market expectations. The London-listed company reported adjusted earnings of $6.92 billion for the first quarter, ahead of the LSEG consensus estimate of $6.1 billion.
Strong Earnings Growth
Shell’s quarterly earnings rose significantly from $5.58 billion during the same period last year. The figure also more than doubled compared to the $3.26 billion reported in the final quarter of 2025.
Dividends and Share Buybacks
The company increased its dividend by 5% to $0.3906 per share, continuing its focus on shareholder returns. However, Shell reduced its quarterly share buyback program to $3 billion from the previous $3.5 billion.
Debt Rises Alongside Oil Prices
Shell’s net debt increased to $52.6 billion, compared to $45.7 billion at the end of last year. Analysts attributed the rise largely to “working capital effects,” as higher oil prices increased the value of inventories held on the balance sheet.
Shell Expands Through ARC Resources Acquisition
To strengthen its long-term production base, Shell announced the acquisition of Canadian energy company ARC Resources for $16.4 billion.
CEO Wael Sawan described ARC as a “high-quality, low-cost and low carbon intensity producer,” highlighting the company’s strong position in the Montney shale basin.
Renewable Energy Firms Gain Momentum
The current crisis has not only benefited oil producers. It has also accelerated interest in renewable energy as European governments push for greater energy independence and lower reliance on imported fossil fuels.
Vestas Reports Strongest Quarter Since 2018
Danish wind turbine manufacturer Vestas posted its strongest first-quarter earnings since 2018.
CEO Henrik Andersen said the company is now “in a much better place” than expected, adding that demand for grid electrification and AI-driven data centers is creating new growth opportunities for the sector.
Orsted Sees Renewables as a Security Solution
Despite recent supply chain challenges, Orsted reported stronger-than-expected profits.
CEO Rasmus Errboe said the Middle East crisis reinforces the need to accelerate the energy transition. He noted that Europe continues to spend billions each week on fossil fuel imports – a cost that renewable energy could significantly reduce.
Equinor Balances Oil Profits and Clean Energy Growth
Norway’s Equinor, still primarily an oil and gas producer, also reported its strongest quarterly profit in three years.
At the same time, the company expects growing momentum in its clean energy business. CFO Torgrim Reitan said the main driver of the energy transition is shifting from “decarbonization” toward “energy security and independence.”
Geopolitics and Policy Continue to Shape Energy Markets
Despite the recent surge in oil prices, Brent crude and WTI futures declined sharply in recent sessions amid hopes of a possible resolution to the conflict.
The renewable energy sector also continues to face political pressure, particularly from U.S. President Donald Trump, who has criticized wind energy projects over costs and land use concerns.
Nevertheless, European policymakers and industry leaders remain confident that the long-term shift toward renewables will continue. Executives such as Vestas CEO Henrik Andersen argue that energy security concerns are now providing additional support for the sector.
Investor Takeaway
The first quarter demonstrated how energy market volatility can benefit both fossil fuel producers and renewable energy companies at the same time.
Oil majors such as Shell continue to profit from rising commodity prices, while renewable energy firms including Vestas and Orsted are gaining support from governments seeking greater energy independence.
Companies with exposure to both traditional energy and clean technology – such as Equinor – may become increasingly important as investors navigate a rapidly changing global energy market.