Insights into Shell’s US Crude Trading Division
A recent lawsuit in a Texas state court unveiled details about Shell’s secretive oil and gas trading operations, shedding light on the profits and bonuses within the trading arm.
Annual Earnings and Profitability
- The former head of Shell’s US crude trading division disclosed that the division consistently earns profits ranging from $950 million to $1 billion annually.
- This accounts for a significant portion of Shell’s overall US pre-tax profits, which amounted to just over $7 billion in 2022 and approximately $6.36 billion in 2021.
Trading Business Implications
The revelation of the division’s contribution underscores the importance of Shell’s trading business within its broader operations. Despite its financial success, Shell maintains secrecy around its trading segment, raising concerns about transparency among investors.
Risks and Rewards
- While the trading business can be profitable, it also carries inherent risks and volatility, sometimes resulting in losses.
- Traders within Shell’s division leverage global supply and demand dynamics to capitalize on market opportunities through buying and selling oil and gas.
Bonuses and Legal Disputes
- Traders receive lucrative bonuses based on performance, sometimes exceeding the annual bonuses awarded to top executives like CEO Wael Sawan.
- A legal dispute involving former trading manager Eva-Maria Frohn highlighted a claim for a $6 million bonus, ultimately leading to a breach of contract claim against Shell.
