Shell posts quarterly loss as charge offsets oil surge
Royal Dutch Shell on Thursday reported a net loss for the third quarter as a huge sum written off by the energy giant offset a surge in oil prices.
Shell said its loss after tax came in at $447 million in the three months to the end of September after writing off $5.2 billion linked to commodity derivatives.
Stripping out the charge, adjusted earnings soared to $4.13 billion from $955 million in the third quarter of 2020.
Earlier this month, the group had already warned of a financial hit from the recent Hurricane Ida of about $400 million.
Shell said adjusted earnings benefited from higher oil and gas prices.
Energy prices have soared over the past year, pushing up inflation which threatens to weigh on the global economic recovery.
Shell chief executive Ben van Beurden said that the group had “generated record cash flow and maintained capital discipline” in the third quarter.
Like its rivals, Shell had slumped into a huge loss in 2020 as the coronavirus pandemic slashed energy demand and prices.
Shell dived into a net loss of $21.7 billion last year as factories shut and planes were grounded.
That resulted in the group shedding thousands of jobs, also mirroring the likes of British rival BP.
After lockdowns began to spread towards the end of last year’s first quarter, oil prices dropped off a cliff, even briefly turning negative.
Prices have since rebounded sharply, with the benchmark Brent North Sea oil contract trading around $85 per barrel.
Gas and electricity prices have also seen massive gains in recent months, boosting income for energy majors but weighing on business costs and individuals’ spending power.