Equinor on Wednesday reported a bigger-than-expected rise in first-quarter profit, lifted by record output and as oil and gas prices soared in March due to the Iran war.
The Norwegian group's adjusted earnings before tax for January-March rose to $9.77 billion, the highest since the first quarter of 2023, from $8.65 billion a year earlier, beating the $9.0 billion forecast in a poll of 23 analysts compiled by Equinor.
The disruption to global energy flows from the U.S.-Israeli war with Iran and the closure of the Strait of Hormuz is expected to last well beyond any end to hostilities, the company said.
"Even if there were to be peace now, it would take some time, and we think maybe a minimum of six months before the situation normalises," CEO Anders Opedal told public broadcaster NRK.
Equinor maintained a decision from February to reduce its share buybacks by 70% this year to bolster cash flows, despite the prospect of windfall profits stemming from Middle East supply disruptions, and kept its regular quarterly cash dividend at $0.39 per share.
Shares in the majority state-owned company are up 62% year-to-date, outperforming a 37% increase in European energy stocks .SXEP, reflecting its position as a major supplier of oil and gas to Europe and with no direct exposure to the Middle East.
The downstream division, which includes energy trading, reported a profit of $787 million, exceeding the $693 million expected by analysts and beating the unit's $400 million long-term quarterly guidance.
Brent crude futures LCOc1 have climbed well above $100 per barrel since the outbreak of the Iran war after trading between $60 and $70 for much of the past 12 months, and the spot price for physical delivery has risen even more.
Europe's benchmark gas price TFMBMc1 has also risen sharply, and is now trading around 50% higher than before the war as Qatar is prevented from delivering liquefied natural gas.
Equinor produced a record 2.31 million barrels of oil equivalent per day in the first quarter, up from 2.12 million boed a year earlier and beating the 2.22 million forecast by analysts.
(Reuters - Reporting by Nerijus Adomaitis and Nora Buli. Editing by Terje Solsvik and Mark Potter)