Shell Plc said its profit surged in the first quarter as the Iran war drove oil and gas prices higher and the conflict caused a increase in volatility that boosted its big trading business.

Adjusted net income rose to $6.92 billion, the London-based company said in a statement. That beat the $6.1 billion median estimate of analysts compiled by Bloomberg. Refining margins also climbed because of soaring fuel prices. Shell cut its quarterly share buyback to $3 billion from $3.5 billion.

Shell’s total oil and gas production fell 4 percent compared with the fourth quarter, mainly due to the impact of the Iran conflict on its Qatari volumes. It expects second-quarter production to decrease as a result of the effective closure of the Strait of Hormuz, as well as higher planned maintenance across the portfolio.

The war has damaged oil and gas assets across the Middle East and all-but halted shipments from the region, causing sharp increases in energy prices and market volatility. That benefited European giants with large trading desks able to deal with those movements.

Brent oil prices have increased more than 50 percent since the conflict began at the end of February. They retreated from war-time highs and hovered around $101 a barrel on Thursday following a report Wednesday that the US and Iran are nearing a deal to end the conflict. 

Shell, which already flagged strong trading, doesn’t break out earnings from its trading operation, but they appear to have climbed sharply. Chemicals and products, the division in which it sits, had adjusted earnings of $1.93 billion, up from $449 million a year earlier. 

That’s despite a weak margin environment for chemicals which has been a drag on earnings during Chief Executive Officer Wael Sawan’s three-year tenure. Shell’s indicative oil refining margin rose to $17 a barrel from $14.

Disruption from the war has created dislocations across energy markets, sending physical premiums surging for crude and fuels, and creating the conditions in which commodity merchants tend to thrive. Vitol Group and Trafigura Group, the biggest independent oil traders, reaped a profit bonanza in the first three months of this year. 

Shell is the final western oil supermajor to report quarterly earnings. Profits for European competitors BP Plc and TotalEnergies SE soared, because of strong trading performances during the war.

US peers Exxon Mobil Corp and Chevron Corp. also benefited from elevated oil and gas prices, but experienced production outages – particularly Exxon – and negative impacts from derivatives positions.

Looking ahead, Shell plans to spend between $24 billion and $26 billion this year, higher than the previously guided range of $20 billion to $22 billion. Shell said that increase includes about $4 billion related to its recently-announced acquisition of ARC Resources Ltd.

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