According to fossil fuel giant Royal Dutch Shell
It's no secret that the oil market has been shrinking for years as cheaper, more eco-friendly energy alternatives proliferate and become far less expensive to procure than fossil fuels. The green initiatives being pursued by many governments are slowly eating into the market share that oil still retains over the energy sector, a trend that will only intensify as the international community deepens its commitments to fighting climate change. The Coronavirus pandemic only hastened that transition, eating into travel demand and driving fuel prices to record lows, eating into the declining profits that the oil industry has still managed to retain, leading to billions in write-downs across the industry.
Shell is acutely aware of the new future that it faces, its CFO having remarked last March that the company suffered from "major demand destruction that we don't even know will come back." The announcement, along with previous statements that the company would be attempting to achieve carbon neutrality by 2050, is so far sending the signal that Shell appears to be planning on a gradual shift away from fossil fuels and into new revenue streams.
The shift away from "dirty" energy production isn't quite the good news that some may hope it to be, either. Shell has already made it clear that, because of the shrinking revenue from its fossil fuel production and the costs of transitioning to clean energy production, the firm will have to lay off 10% of its workforce, and has recently announced that it is freezing salaries and cutting bonuses to save money.
Shell's announcement came last Thursday and was immediately met with skepticism by Wall Street, as evidenced by the considerable single-day drop in the company's share price. Shell's A-class stock dropped 7.5%, sliding from Wednesday's closing price of $38.34 to $35.45. Shell's B class stock