Energy crisis impact dominates Shell AGM

The figures released ahead of this year’s Shell AGM spoke for themselves, the Anglo Dutch oil and gas giant released that adjusted earnings had surged 112% quarter-on-quarter to $6.9bn as the firm stood to benefit from the global spike in fossil fuel prices.

CEO Wael Sawan opened the event with an acknowledgement of the severity of the crisis, with some of Shell’s facilities having been hit. He argued that the crisis demonstrated that oil and gas would still play a vital role in the global economy for decades to come.

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“The crisis has provided yet another reminder of the fundamental importance of energy. Energy underpins economic and industrial strategy, digital security and climate goals. In other words: there is no national security without energy security” he told an audience of investors.

While executives did not rule out greater allocations to renewable energy if market conditions changed, chair Andrew Mackenzie argued that right now, “renewables are not earning a competitive return.”

Short- vs long-tem vision

Short-term windfalls form higher oil and gas prices also overshadowed investor support for this year’s climate resolution co-filed by Follow This alongside a group of 21 long-term institutional investors, including Achmes, Ethos Pensions Kasse, Lothian and West Yorkshire Pension Fund.

Investors asked Shell to set out its plan for a scenario of falling oil and gas prices, but against the context of the recent sharp spike in oil and gas prices, investor backing for the resolution stood at 13%, significantly lower than previous years, where Follow This resolutions had attracted some 19-20% of shareholder votes.

Responding to the voting results, Follow This Founder Mark van Baal urged investors to retain their long-term vision and not to be “distracted” by the short-term surge in prices.

“With a $110 oil price today – up from $62 in December 2025 when we filed the resolution – it is easy to be distracted by temporary war profits and lose sight of the medium and long term,” said Van Baal. “Some may still consider this a climate vote – it is a financial one” he argued.

The clash between short-and long-term vision also manifested itself in shareholders questioning recent expansion plans, in particular the latest decision to acquire Canadian energy firm ARC Resources, which focusses on shale gas production in Canada’s Montney shale basin. Investors pointed out that some of the pipelines would not be operational until the 2030’s.

"Despite us previously raising concerns about Shell’s lack of responsiveness to major geopolitical upheavals, the chair seemed unprepared to respond to questions around the expected LNG demand destruction resulting from the crisis in Iran. It is surprising and concerning to hear that Shell sees little reason to review its thinking on LNG demand growth in countries that have been severely impacted by the expensive and volatile nature of LNG" warned Nick Mazan, sector strategy lead Oil & Gas at ACCR.

"Shell’s resistance to reevaluating its major bet on LNG, in light of the biggest shock to energy markets, suggests a degree of path determinism in its thinking that is likely to unsettle investors" he added. 

With some 20% of LNG having been taken off the market as a result of the war in Iran, the IEA said the period of oversupply previously anticipated could be delayed, with supply remaining tight for the coming two years.

However, IEA also pointed out that natural gas demand has weakened in key importing markets in response to higher prices with natural gas demand across Europe dropping by 4% YOY in March.

In its latest oil market outlook, the IEA said that global oil demand is forecast to contract by 420 kb/d y-o-y in 2026, to 104 mb/d, this is less than half of its pre-war forecast. The biggest decline is in 2Q26, down by 2.45 mb/d against estimates.

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