Shell said it had seen a boost in oil trading in the first quarter as the conflict in the Middle East pushed prices higher.

The energy giant said trading in its chemical and products business, which includes oil trading, is expected to be 'significantly higher' in the first quarter after a jump in energy prices.

Meanwhile, its marketing division – which includes its network of petrol stations – is also expected to be 'significantly higher' than the previous year.

But the FTSE 100-listed firm said it had slashed its gas production for the first quarter of the year after being affected by the conflict in the Middle East.

It is the first update by the oil major since the start of the Middle East conflict, after reporting an 11 per cent drop in fourth-quarter profits.

Shell slashed its guidance for integrated gas production after Qatar liquefied natural gas (LNG) volumes took a hit from recent attacks.

It forecasts gas production of 880,000 to 920,000 barrels of oil equivalent per day (BOED), down from its initial outlook of between 920,000 and 980,000 barrels.

Last month, a Shell site in Qatar stopped production after being hit during attacks while LNG facilities in the country owned by Shell have also been affected.

The company initially said it would take 12 months to repair, but Qatari officials have said some of the damage to sites could take years to reconstruct.

Shell's shares fell by 6.5 per cent to 3,336p this morning as markets reacted to news of a ceasefire between the US and Iran.

Brent crude is down around 13 per cent to $95 a barrel as Iran confirmed it would allow two weeks of 'safe passage' in the key shipping route, through which a fifth of the world's oil passes.

Dan Coatsworth, head of markets at AJ Bell said: 'Shell has as much control over the trajectory of the price of its core products as King Canute had over the rising tide.

'The sheer volatility in commodity markets is reflected in wild swings in Shell's working capital and, for all the benefit the company might enjoy from elevated energy markets, it comes with complications and headaches too.

'To set itself on a sustainable path, Shell needs to look through the short-term noise and work out how it will deliver growth over the long term.