Shell Navigates Contradictory Oil Market as Renewables Retreat Deepens
Published on 06/18/2026 at 15:33 | Redaktion boerse-global.de
The global oil market is speaking with two tongues. On one side, geopolitical jitters and depleted US inventories are pushing crude higher. On the other, the International Energy Agency is sounding the alarm over a looming glut that could swamp the industry by 2027. For Shell, already in the midst of a wrenching strategic pivot, the mixed signals could hardly come at a worse time.
Chief executive Wael Sawan is pressing ahead with a radical return to the company’s fossil-fuel roots. Shell has put its remaining offshore wind farms up for sale, tapping Rothschild & Co. and PJT Partners to run the process. The portfolio could fetch more than $1 billion, with a formal auction expected to begin in late 2026 and a deal closing the following year. The move follows the divestment of Shell’s European onshore renewables business and its Indian subsidiary Sprng Energy. The ambition once trumpeted by Sawan’s predecessor — to become the world’s largest power company — has been quietly buried.
Yet even as Shell sheds its green assets, it is hedging its bets in electric mobility. The company’s Shell Recharge arm opened a joint laboratory with Chinese partner SINEXCEL in Shenzhen this week. The facility will focus on ultra-fast charging systems and megawatt-level technology for commercial vehicles. No financial details or product commitments have been disclosed, and for now the lab remains a research-oriented venture.
Should investors sell immediately? Or is it worth buying Shell?
The market’s immediate attention, however, is fixed on oil. US crude inventories fell by 8.3 million barrels last week, leaving reserves roughly 6% below their five-year average, while refinery utilisation climbed to nearly 97%. A fragile détente between the US and Iran remains in doubt; contradictory statements from President Donald Trump have kept traders guessing. Brent crude was hovering near $80 a barrel, with WTI approaching $77.
But the IEA’s latest report casts a long shadow. The agency slashed its demand forecast, predicting a decline of 1.1 million barrels per day in 2026. For 2027, it projects global supply surging above 110 million barrels a day, while demand struggles to reach 105 million — creating an enormous surplus. Shell’s first-quarter results, which showed adjusted earnings of $6.9 billion and operating cash flow of $17.2 billion, underscored the benefit of today’s elevated prices. Yet the volatile backdrop also cost the company $11.2 billion in working capital outflows, as wild price swings tied up cash. Management has warned that the Middle East conflict and planned maintenance will continue to weigh.
Investors are already factoring in the headwinds. Shell’s shares slid to €34.37 on Thursday, a seven-day drop of more than 7%, and the relative strength index has fallen to 29.8 — a technically oversold reading. A suspended share buyback programme has compounded the gloom. For those waiting for a small consolation, the interim dividend for the first quarter is due on 29 June 2026, with €0.3381 per share in the euro-denominated tranche. It may offer a slender safety net, but with the IEA’s supply super-cycle bearing down and a CEO determined to exit renewables, Shell is navigating one of its most fraught transitions in years.
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