The giants of black gold have returned to the green. On the occasion of their results for the first quarter, the main European oil companies post significantly higher results. And for good reason: their balance sheets for the first quarter of 2020 had been hit hard by the drop in demand due to containment measures and especially to the price war between Russia and Saudi Arabia.
A year later, this episode seems distant to the European “majors”. The French Total saw its net profit jump to 3.3 billion dollars in the first quarter of 2021 – 100 times more than in 2020. The group is even better than during the same period in 2019, before the crisis. Britain’s BP is doing even better, with a net profit of 4.7 billion dollars – against a net loss of 4.4 billion in early 2020. Ditto for Shell, which garnered 5.7 billion dollars in the first quarter (against 24 million profit a year ago).
The cause of this rebound is obvious: the rise in the price of a barrel of oil, firmly established above 60 dollars since the start of 2021. This relatively high level remains supported by the massive quotas imposed by the countries. of the Organization of the Petroleum Exporting Countries (OPEC), and in particular Saudi Arabia, and their Russian ally. In April 2020, in the midst of the global pandemic, disagreements between Riyadh and Moscow had led the price of a barrel to plummet. The big oil companies then had to cancel numerous investments and announce a severe turn of the screw.
A “multi-energy” shift
This period seems over, and the rise in hydrocarbon prices allows the majors to emerge from the particularly brutal shock of 2020. And to consider the future more calmly: “Overall, the trend is in the right direction”, says Shell CFO Jessica Uhl. “Total has already returned to its rate of high results as before the crisis (…) Everything is fine “, assures the CEO of Total, Patrick Pouyanné, in a daily interview South West.
But this meteoric rise illustrates the reality of these giants with feet of clay: they are still ultra-dependent on the price of hydrocarbons. The three largest European companies, however, have a completely different ambition: since 2020, BP, Shell and Total have committed to achieving a “carbon neutrality” objective by 2050 – even if they remain unclear on the definition of this.
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