* Europe's top-three majors made billions trading in Q1,

sources say

* BP flags 'exceptional' trading results

* Shell, TotalEnergies also report strong trading results

* Chevron ( CVX ), Exxon fail to capitalise on crisis, shares

trail

By Shadia Nasralla, Stephanie Kelly and Dmitry Zhdannikov

LONDON, April 17 (Reuters) - The trading desks of

Europe's top three oil majors have reaped billions of dollars

from the energy supply crunch caused by the Iran war, eclipsing

their more cautious U.S. rivals and helping offset the

conflict's impact on their production operations.

The war launched by the United States and Israel in late

February and Tehran's retaliation against its neighbours have

damaged oil and gas infrastructure, disrupted shipping through

the Hormuz strait and kept a large chunk of Gulf production off

the market.

But the resulting energy price volatility has also been an

opportunity for traders.

Together, the trading desks at British majors BP and

Shell and France's TotalEnergies made at

least $2.5 billion in the first quarter, according to Reuters

calculations based on information from sources at each company.

All of the sources asked not to be named as oil companies do

not disclose detailed trading results, which they consider

strategically sensitive.

European majors have spent decades building trading desks,

employing hundreds of people who buy and sell crude, fuels and

gas to take advantage of price gaps across regions and time

periods, while also taking positions in derivatives markets.

Companies with large trading operations can turn volatility

into earnings - a model that has paid off amid the Iranian

crisis, which has created the largest global oil disruption in

history.

U.S. majors Exxon Mobil ( XOM ) and Chevron ( CVX ), by

contrast, mainly use traders to optimise flows within their own

networks of production, refineries and fuel retail outlets. That

approach prioritises predictability but limits opportunities to

profit from extreme market moves.

EUROPEANS SCORE TRADING WINS, SHARES SURGE

These divergent strategies have in recent weeks been

reflected in the companies' stock performance, with shares in

BP, TotalEnergies and Shell all gaining significantly since the

start of the conflict, while Exxon and Chevron ( CVX ) have both

slipped.

Without giving away details, the Europeans have flagged

their trading windfalls in recent outlook updates.

BP this week said its oil trading performance in the first

quarter was "exceptional" - language it has not used for oil and

gas trading in its quarter-on-quarter comparisons since the peak

of the Ukraine war-induced energy crisis in 2023, usually

limiting its comments to weak, average or strong.

"BP is not given to hyperbole. So calling its results

'exceptional' is telling," said David Hewitt, senior consultant

at Hewitt Energy Perspectives.

BP, which produced 2.3 million barrels of oil equivalent of

oil and gas per day last year, has said that in recent years it

has traded around 10 times its oil production and eight times

its refined product capacity, or around 9 billion barrels per

year.

Shell, the world's biggest liquefied natural gas trader, said

strong first-quarter oil trading should help counter the impact

on its earnings from production outages linked to the war.

Last year, it produced around 2.8 million boed of oil and

gas and refined around 1.2 million bpd. It traded around 12

million bpd.

TotalEnergies expects a significant boost to first-quarter

earnings from trading, even as the war shut in about 15% of its

production. The company, which produced 2.5 million boed last

year, said it traded 8 million bpd of physical oil volumes and

85 million bpd in derivatives.

Norway's Equinor ( EQNR ) has also said trading will lift

earnings, helped by oil price volatility tied to the Middle East

conflict and gas price spikes in Europe.

CAUTIOUS U.S. MAJORS EXPECT BIG QUARTERLY EARNINGS HITS

Exxon, the largest U.S. oil producer, has historically

approached trading with caution.

After Chief Executive Darren Woods took office in 2017, it

sought to expand its trading unit, but then scaled back those

efforts during the downturn provoked by the coronavirus

pandemic, sources said at the time.

"U.S. majors have traditionally treated trading as an

optimisation tool to avoid large swings in quarterly earnings,"

said Hewitt, who once worked for Chevron ( CVX ).

Neither Exxon nor No. 2 U.S. producer Chevron ( CVX ) made reference

to trading gains in their outlook statements ahead of

first-quarter results.

Instead, Exxon warned that its first-quarter earnings could take

a hit of around $5.3 billion mainly due to timing impacts from

derivatives and, to a lesser extent, undelivered cargoes linked

to the war.

Chevron ( CVX ) also flagged that similar timing effects from hedging

could hit after-tax earnings by $2.7 billion to $3.7 billion.

Both said they expected the timing impacts to unwind and

lead to profitability in later quarters.

BP reports results on April 28, followed by TotalEnergies on

April 29, Exxon and Chevron ( CVX ) on May 1, and Shell on May 7.