LONDON: Royal Dutch Shell’s 2020 earnings doubled from trading crude oil and refined products from the previous year to $ 2.6 billion, helping to offset a sharp decline in fuel demand due to coronavirus pandemic.
Shell’s oil trading activity, known as Insider Trading & Supply, accounted for 43% of the total oil production share of $ 5.995 billion in 2020. Trade earnings reached $ 1.3 billion in 2019, a report said Shell annual report, published Thursday.
The unusually high contribution from trading helped Shell weather in one of the toughest years in the industry ‘s history, when energy consumption fell due to the pandemic.
Shell, the world’s largest energy trader, fell a 28% drop in oil sales last year to an average of 4.71 million barrels per day, the annual report said.
Its 2020 profit fell to its lowest level in at least two decades.
Shell oil trading figures do not include natural gas, liquefied natural gas, energy and renewables. Shell is the largest leach natural gas trader in the world.
Rival BP’s trading arm made nearly $ 4 billion in 2020 on oil and gas trading, a copy of BP’s internal display seen by Reuters showed, almost equal to the company’s 2019 record trading profit.
Companies can make huge profits even at times of lower demand for goods by storing produce such as oil on land or at sea. Shell’s cooling, trading and wholesale sales will also allow it to take advantage of short-term changes in supply and demand around the world.
The strong trading results for BP and Shell show that there is real value creation that shifts to renewable energy as the companies move away from oil and gas, Bernstein analyst Oswald Clint said in a note .