Adjusted net income rose to $6.92 billion, the London-based oil major said in a statement. That beat the $6.1 billion median estimate of analysts compiled by Bloomberg, as surging oil and gas prices lifted returns.

Shell, which recently announced the acquisition of Canadian oil and gas producer ARC Resources Ltd. — its biggest transaction under the tenure of Chief Executive Officer Wael Sawan — cut its quarterly share buyback and raised its dividend. The shares fell, though the move was in line with that of European peers as optimism about an end to the Iranian conflict pushed down oil prices.

The war has damaged assets, roiled energy markets and choked off energy flows through the Strait of Hormuz and caused sharp price wings — conditions that normally favor larger commodity merchants. Vitol Group and Trafigura Group, the biggest independent oil traders, reaped a profit bonanza in the first three months of this year. Shell said its trading profits were boosted by the conflict, helping it to overcome a 10% hit to oil and gas production caused by disruptions in Qatar.

Total production fell about 4% from the prior period. The impact is set to linger, with second-quarter volumes expected to decline further amid continued constrains in the region and overall maintenance across Shell’s portfolio.

The ARC acquisition is contributing to a rise in capital spending plans this year and part of a broader effort to deepen its upstream reserves as geopolitical turmoil reshapes global energy flows. The buyback was cut to $3 billion from $3.5 billion. Shell increased its dividend 5%, maintaining its policy of distributing 40% to 50% of cash flow from operations to shareholders.

JPMorgan Chase & Co. analysts said the reallocation of capital was “value-led” and showed Shell’s confidence in its overall strategy, including the ARC acquisition.

Higher refining margins also supported quarterly results, even with a weaker chemicals margin environment.

Brent oil prices have increased more than 50% since the conflict began at the end of February. They retreated from war-time highs and hovered around $99 a barrel Thursday on signs that the US and Iran are nearing a diplomatic breakthrough.