Shell: The oil giant would benefit from production cuts.

Last Updated: 6. Dezember 2023By

The OPEC+ discussed the future oil production policy on November 30th, 2023. In addition to existing production cuts, a cut of about one million barrels of crude oil per day could be decided. Let’s take a closer look at why this could be good news for Shell.

Production cuts would cause profits to flow more abundantly Shell is one of the largest energy companies in the world and is involved in exploration and production projects for oil and natural gas in about 70 countries. The company is also one of the world’s largest distributors of fuels and lubricants. An oil production cut would play directly into Shell’s hands, as it would likely cause oil prices to rise. But even at the current oil price level, the oil giant is doing great. Profits flow daily, even as economies around the world switch to cleaner sources of energy. Most analysts believe that while renewable energy will meet future energy needs, demand for oil and gas will not completely dry up.

Net-zero emissions energy company by 2050 Shell’s end products also include fuels and lubricants, bitumen, and LPG for direct sale to consumers and industry, and for transport use. The company itself is pursuing the ambitious goal of becoming a net-zero emissions energy company by 2050 or earlier.

Attractive dividend value The dividend yield for 2023 is 3.8% and the P/E2023e is 7.8. Technically, after the breakout from the sideways movement, we are currently seeing a correction into the area of the breakout level.

Shell stock in the weekly chart – ISIN: GB00BP6MXD84


Conclusion Even though alternative energy is increasingly finding its way into our everyday lives, fossil fuels will still accompany us for many years to come. With the abundant profits from the oil and gas business, Shell can also position itself in the renewable energy sector to prepare for the future.