In March and early April 2026 the Strait of Hormuz is largely blocked by Iran after attacks on Iran by the USA and Israel. The oil price has gone up to $110 per barrel, but if production / flow is limited by 10 million barrels a day and demand is 100 million, I think the price could go towards $200 a barrel (or not if fighting stops). Shell, formerly Royal Dutch Shell ticker RDS.A, now has the ticker LON:SCHEL.
The use of oil worldwide is still increasing (slowly) despite costs coming down. Eventhough in Europe, (where gas costs > $10 per gallon) solar-powered driving has become much cheaper ( roughly 4x cheaper ) than gasoline.
Global liquid fuels consumption
(million barrels per day) | 2024 102.8 | 2025 103.9 | 2026
105.2 | 2027
106.6 |
My guesstimate for 2026 Earnings Per Share (EPS) is EUR 5,5 .
GRAHAM DEFENSIVE ANALYSIS:
SECTOR: [PASS] SCHEL is neither a technology nor financial Company, and therefore this methodology is applicable.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. SCHEL's sales of $228 000 million, based on last year and current sales, pass this test.
CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. SHEL's current ratio $91 256m/$70 000m of 1.3 fails the test.
LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for SCHEL is $96 000 million, while the net current assets are $44,000 million. SHEL fails this test.
LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. SCHEL's lost money over 2020 and fails the test.
EARNINGS YIELD: [PASS] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. SCHEL's E/P of 8% (using the average of the last 2 years and this year's estimated earnings) passes this test.
Dividend: was €1,25/€40 = 3%
Conclusion October 2nd 2020 at EUR 10: Seems like a buy today. Longterm solar plus batteries is getting cheaper than oil.
Conclusion October 2022 at EUR 26: Seems more fairly priced now.
Conclusion April 2026: If oil prices fall again, then Shell might be expensive at EUR 40 today.
PS : Beware "windfall" taxes: Gemini AI: Lowering Earnings per Share by about 10%
"The Call: 75% Probability
I put the chance of Shell taking a hit from extended or new windfall taxes at 75%.
I am not absolutely sure—predicting political maneuvers is never a certainty—but the current conditions make it highly probable.
The Reality on the Ground (April 2026)
Governments need cash to subsidize consumer energy bills, and fossil fuel margins are the easiest political target. Here are the primary facts driving this assessment right now:
The UK Reversal: Shell is heavily exposed to the UK's Energy Profits Levy (EPL), which already sits at a 78% headline rate. Chancellor Rachel Reeves was preparing to scrap this tax early. That plan is now dead in the water. Due to the recent price spikes stemming from the US-Israeli strikes on Iran, Reeves has officially delayed the phase-out.
The EU Offensive: The continent is moving in the exact same direction. Just this past weekend, finance ministers from five major economies (Germany, Italy, Spain, Portugal, and Austria) formally demanded that the EU Commission implement a new, EU-wide windfall tax to fund temporary consumer relief.
The legislative blueprints from the 2022 energy crisis are already drawn up. When politicians face widespread public outrage over inflation at the pump, they will not hesitate to pull those levers again."
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