<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



Greenpeace is facing a major new legal threat in the form of a $2.1 million lawsuit from oil giant Shell,&nbsp;<a href="https://www.reuters.com/sustainability/climate-energy/shell-sues-greenpeace-21-million-after-boarding-oil-vessel-2023-11-09/" target="_blank" rel="noreferrer noopener">multiple outlets</a>&nbsp;<a href="https://www.theguardian.com/business/2023/nov/09/shell-sues-greenpeace-over-fossil-fuel-protest-in-north-sea" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;Thursday, after the environmental advocacy group’s protestors occupied a floating oil platform in January in what one spokesperson called an “unlawful and extremely dangerous” stunt.



Greenpeace activist Yeb Saño holds aloft a flag on a rib after attempting to board a Shell oil&nbsp;&#8230; [+]GETTY IMAGES



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



U.K.-based Shell filed a claim against Greenpeace UK and Greenpeace International in London&#8217;s High Court alleging the&nbsp;<a href="https://www.theguardian.com/environment/2023/jan/31/greenpeace-protesters-board-shell-platform-bound-for-shetland" target="_blank" rel="noreferrer noopener">occupation</a>&nbsp;of a floating oil production vessel by protesters earlier this year cost the company money in shipping delays and forced it to hire extra security,&nbsp;<a href="https://www.reuters.com/sustainability/climate-energy/shell-sues-greenpeace-21-million-after-boarding-oil-vessel-2023-11-09/" target="_blank" rel="noreferrer noopener">Reuters</a>&nbsp;reported.



Shell has asked the court to stop any future protests on the company’s infrastructure at sea or in port, according to the&nbsp;<a href="https://www.theguardian.com/business/2023/nov/09/shell-sues-greenpeace-over-fossil-fuel-protest-in-north-sea" target="_blank" rel="noreferrer noopener">Guardian</a>, and threatened to file further claims on behalf of contractors that could be worth as much as $8.6 million.



Greenpeace has accused Shell of trying to silence any legitimate protests of its fossil fuel operations, but Shell has said the lawsuit is focused only on protests at sea and is designed partly to protect the safety of protesters.



A spokesperson for Shell said in an email to&nbsp;Forbes&nbsp;that the protest was &#8220;unlawful and extremely dangerous.&#8221;



In a&nbsp;<a href="https://www.greenpeace.org/international/press-release/63522/shell-hits-greenpeace-with-intimidation-lawsuit-threatening-8-6m-damages-claim-and-protest-ban-to-silence-climate-demands/" target="_blank" rel="noreferrer noopener">statement</a>&nbsp;posted to its website Thursday, Greenpeace called the lawsuit an attempt “to silence growing dissent over moves by Shell’s chief executive” and said Shell has offered to settle for $1.4 million if Greenpeace vows to never again stage a protest “at its infrastructure” at sea or in port.



Greenpeace said it would only comply with the request if Shell &#8220;agreed to stop wrecking the climate&#8221; and comply with a Dutch court order to reduce its emissions by 45% by 2030.



Greenpeace activists hold a billboard during a protest outside Shell headquarters amid the companies&nbsp;&#8230; [+]CHRIS J RATCLIFFE FOR GREENPEACE VIA GETTY IMAGES



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<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



“The right to protest is fundamental and we respect it absolutely. But it must be done safely and lawfully,” Shell’s statement reads. “Shell and its contractors are entitled to recover the significant costs of responding to Greenpeace’s dangerous actions.”



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



Climate activists used ropes to hoist themselves onto a floating production storage and offloading vessel from inflatable boats they used to chase the Shell ship. The protestors boarded the vessel just north of the Canary Islands and rode it for 13 days,&nbsp;<a href="https://www.greenpeace.org/international/press-release/63522/shell-hits-greenpeace-with-intimidation-lawsuit-threatening-8-6m-damages-claim-and-protest-ban-to-silence-climate-demands/" target="_blank" rel="noreferrer noopener">according to Greenpeace</a>. No arrests were made. The vessel was bound for the not-yet-operational Penguins oil and gas field in the North Sea, and protestors were imploring the company to stop drilling for new oil and gas and &#8220;instead take responsibility for causing climate breakdown.” The Penguins platform is the first new northern North Sea project for Shell in 30 years and&nbsp;<a href="https://www.shell.com/about-us/major-projects/penguins.html" target="_blank" rel="noreferrer noopener">is expected</a>&nbsp;to yield 45,000 barrels of oil per day.



Greenpeace activists hang a banner on July 24, 2014 in front of a Shell gas station in Santiago,&nbsp;&#8230; [+]AFP VIA GETTY IMAGES



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



$39.9 billion. That&#8217;s how much money&nbsp;<a href="https://www.cnbc.com/2023/02/02/shell-earnings-oil-giant-reports-record-annual-profits.html#:~:text=Shell%20reported%20adjusted%20earnings%20of,2021%20profit%20of%20%2419.29%20billion." target="_blank" rel="noreferrer noopener">Shell reported in adjusted earnings&nbsp;</a>in 2022, more than double its 2021 profit of $19.29 billion.



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



This isn’t the first time Shell and Greenpeace have butted heads. The two famously faced off back in 1995 when the oil company, known at the time as Royal Dutch Shell, proposed it would get rid of its decommissioned rig called the Brent Spar <a href="https://www.greenpeace.org/international/story/47744/brent-spar-the-sea-is-not-a-dustbin/" target="_blank" rel="noreferrer noopener">by sinking it</a> in the North Atlantic Ocean. Greenpeace activists occupied the tanker for three weeks and organized a boycott of service stations worldwide while claiming the vessel Shell was trying to sink had 5,500 tons of oil on board. The estimate was vastly higher than what Shell claimed and what later proved to be true—Greenpeace ultimately issued an apology. Shell withdrew its plan to sink the Brent Spar. Greenpeace later successfully protested Shell&#8217;s <a href="https://www.greenpeace.org/international/story/7022/you-did-it-shell-abandons-arctic-drilling/" target="_blank" rel="noreferrer noopener">2006 plan</a> to drill for oil in the Arctic. Two years ago, Greenpeace was involved in a <a href="https://www.reuters.com/business/energy/shell-wins-court-case-start-seismic-surveys-offshore-south-africa-2021-12-03/" target="_blank" rel="noreferrer noopener">failed attempt</a> to stop the company from looking for oil in humpback whale breeding grounds on South Africa&#8217;s coast.

Shell Posts Quarterly Profits

Shell Sues Greenpeace For $2 Million After Protest On Moving Oil Platform — The Latest Clash Between The Two

<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



Global oil demand reached record levels in June and is poised to peak again in August, the International Energy Agency&nbsp;<a href="https://www.iea.org/reports/oil-market-report-august-2023" target="_blank" rel="noreferrer noopener">said</a>&nbsp;on Friday, warning that price hikes could be on the horizon as slowing outputs from major suppliers like Saudi Arabia tighten supply.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



World oil demand hit a record 103 million barrels a day in June, the IEA said.



The agency said demand could rise further in August and demand for 2023 as a whole is expected to reach 102.2 million barrels a day.



The figure, an increase of around 2.2 million barrels a day from the year before, would mark the highest ever annual level, the agency said.



China is responsible for the lion’s share of this growth, accounting for more than 70% of the uptick, the IEA said, adding that demand there was “stronger than expected” and reached new highs “despite persistent concerns over the health of the economy.”



Strong summer air travel and the increased use of oil in power generation also contributed to increased demand, the IEA said.



The IEA forecast continued, albeit slower, growth for oil demand in 2024, pointing to “lacklustre economic conditions,” new electric vehicles and the “post-pandemic rebound running out of steam.”



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



Oil prices could be poised to rise even higher in coming months as major producers, particularly Saudi Arabia, move to constrict supplies. Previous production cuts from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have helped&nbsp;<a href="https://www.reuters.com/markets/commodities/oil-benchmark-brents-price-structure-reflects-tighter-market-2023-08-10/" target="_blank" rel="noreferrer noopener">drive</a>&nbsp;oil prices up and the IEA warns the bloc’s targets, if maintained, pose “a risk of driving prices still higher.”



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



The IEA said Russia’s oil exports breached the price cap put in place by the Group of Seven (G7) nations. Prices reached an average of $64.41 a barrel last month, the IEA said, above the $60 a barrel cap the group set. The cap was designed to limit Moscow’s ability to fund its war in Ukraine while simultaneously averting chaos in global energy markets by keeping its oil on the markets and it limits how companies can move Russian oil by cutting access to things like insurance and other key services should they pay more than this threshold. The rule has changed the map of global oil supply chains and exports from Russia, a major producer, away from Europe and towards Asia. The IEA said crude exports to India and China accounted for 80% of Russia’s shipments.



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<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



While oil demand dropped during the Covid-19 pandemic and as the world shifted to greener forms of energy, supplies have also tightened from output cuts and disruption from Russia’s invasion of Ukraine. The recent squeeze, spearheaded by Saudi Arabia’s voluntary production cuts, have helped push prices up and Brent crude, a key international benchmark, was trading at $88 dollars a barrel on Thursday, a six month&nbsp;<a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">high</a>.



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/roberthart/2023/07/19/electricity-demand-slows-in-2023-as-economic-downturn-and-energy-crisis-weighs-on-growth-iea-says/">Electricity Demand Slows In 2023 As Economic Downturn And Energy Crisis Weighs On Growth, IEA Says</a>&nbsp;(Forbes)



<a href="https://www.bloomberg.com/news/articles/2023-08-11/global-oil-demand-hits-record-and-prices-may-climb-iea-says" target="_blank" rel="noreferrer noopener">Global Oil Demand Hits Record and Prices May Climb, IEA Says</a>&nbsp;(Bloomberg)



<a href="https://www.reuters.com/markets/commodities/iea-lowers-2024-oil-demand-growth-forecast-2023-08-11/" target="_blank" rel="noreferrer noopener">IEA sees slower 2024 oil demand growth, tightening market this year</a>&nbsp;(Reuters)



<a href="https://www.bbc.com/future/article/20230726-an-experts-guide-to-peak-oil-and-what-it-really-means" target="_blank" rel="noreferrer noopener">Is the decline of oil in sight?</a> (BBC)<a href="https://www.forbes.com/sites/roberthart/"></a>

Oil pump with candle stick graph chart in the background. World Oil Industry

Oil Prices Poised To Soar As Global Demand Hits Record High, IEA Says

After record production cuts in April intended to prop up the market amid a demand crisis caused by the coronavirus pandemic, the world’s largest oil producers are <a rel="noreferrer noopener" href="https://www.nytimes.com/2020/07/12/business/economy/opec-russia-oil-production-coronavirus.html" target="_blank">expected</a> to ease up on the restrictions and begin to increase their output next month.



KEY FACTS



<ul><li>Saudi Arabia, Russia, and the other members of OPEC+ will meet Wednesday to discuss the current market situation and debate future production limits, the Wall Street Journal <a rel="noreferrer noopener" href="https://www.wsj.com/articles/opec-allies-set-to-ease-oil-cuts-seeing-pandemic-recovery-11594510347" target="_blank">reported</a> over the weekend, adding that most delegates in the organization support loosening restrictions.</li></ul>



<ul><li>As lockdown measures ease across the globe, demand for oil is slowly beginning to rise again as shipping and air travel resume. </li></ul>



<ul><li>Oil prices are still down significantly from pre-pandemic levels, however, with the Brent international benchmark priced at about 30% of January levels. </li></ul>



<ul><li>The International Energy Agency said Friday that while global demand for oil had recovered strongly in China and India in May, world demand is still projected to decline during the second half of the year before recovering in 2021. </li></ul>



<ul><li>The recent spike coronavirus cases and new lockdowns are creating “more uncertainty”: additional lockdowns could discourage travel and international trade, which would put more downward pressure on prices.</li></ul>



<ul><li>The risk to the oil market is “almost certainly to the downside,” the IAE said. </li></ul>



KEY BACKGROUND



In April, the members of the Organization of Petroleum Exporting Countries (OPEC) and its allies&nbsp;<a href="https://www.forbes.com/sites/sarahhansen/2020/04/09/saudi-arabia-and-russia-agree-to-historic-oil-production-cuts-but-they-may-not-be-enough-to-rescue-the-market/#63cf1d8c641a">agreed to record oil production cuts</a>&nbsp;of 9.7 million barrels a day as the coronavirus decimated global demand for crude oil. The agreement put an end to a weeks-long price war between Russia and Saudi Arabia that added even more pressure to an already-struggling market.&nbsp;



CRUCIAL QUOTE



“If OPEC clings to restraining production to keep up prices, I think it’s suicidal,” a person familiar with Saudi Arabia’s thinking told the Journal. “There’s going to be a scramble for market share, and the trick is how the low cost producers assert themselves without crashing the oil price.”



 &#8211; <a href="https://www.forbes.com/sites/sarahhansen/">Sarah Hansen</a>, Forbes Staff, <a href="https://www.forbes.com/markets">Markets</a>

Preis für Rohöl an der Börse

OPEC And Its Allies Are Ready To Boost Production, But Here’s Why An Oil Market Recovery Isn’t Guaranteed

Recovery in oil prices will depend on recovery in the global economy, says Annabel Bishop, Chief Economist at Investec in Johannesburg.



The recent collapse in the WTI (West Texas Intermediate) oil price has added to negative market sentiment, in an environment where risk aversion was already at high levels. Worsening forecasts of the economic impact of Covid-19 has been a key driver of the elevation in risk aversion in global financial markets, with the global recession expected to be deep and lengthy.



The crisis is unprecedented, and there is no certainty of its length and duration, or the impact it will have. Uncertainty heightens risk aversion in financial markets and the deep recessions forecast around the globe exacerbates risk-off sentiment. Risk aversion in financial markets would indeed be exacerbated further if economic growth forecasts for advanced economies weaken substantially further, and/or if uncertainty around Covid-19 intensifies instead of waning.



While this is not expected, should the path of the pandemic change, the discovery of vaccines and treatment/s be seen to be substantially delayed, the extent of disruptions to supply chains and production substantially greater than anticipated and/or policy responses viewed as insufficient, risk-off in global financial markets could escalate substantially further.



The severe negative impact on health in the United States, as fatalities and infections rise, has likely also been extremely negative for financial markets’ sentiment, with the world’s largest economy expected to see a deep recession this year (-5.9% y/y IMF), and with the negative impacts leaching into next year as well.



Financial markets are still at weak levels, and are likely to remain volatile and weak in the near term until evidence for the beginnings of a recovery in the global economy become clearer.



The collapse in the WTI oil price has come as chronic oversupply of oil has occurred. Storage facilities are close to capacity, inventories are very high, and demand is extremely weak. While WTI was negative yesterday morning at -$4.4/bbl, with pricing on May futures, (with suppliers essentially paying to have deliveries taken off their hands), the Brent crude oil price was at $23.8/bbl. It was expected that soon the WTI pricing would revert to June futures and as a result, the WTI price move back towards that of Brent – this has been in the process of beginning to occur this afternoon as US markets have opened. However, the Brent crude oil price has weakened with its pricing also determined by future contracts. Storage facilities are near full capacity, and demand is exceptionally weak, and production capacity has not been reduced instantly as this is not possible.



WTI and Brent are one of the two main benchmarks for oil prices worldwide, Brent is North Sea crude oil essentially, WTI Texas crude oil, both are light sweet crude oils. The quoted prices are influenced by the futures prices, as noted above, which have collapsed and oil prices in the immediate term are likely to be suppressed. While there are a number of other issues besetting the pricing WTI as well, the prices are not expected to lift until substantial supply cuts occur and demand increases notably. While oil importers will gain, and oil exporters lose substantial revenues, the recovery in oil prices will depend on the recovery in the global economy.



The IMF highlights that “(a) partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound. Much worse growth outcomes are possible and maybe even likely. This would follow if the pandemic and containment measures last longer”. This signals a suppressed view for oil prices for some time.

Tag: Oil & Gas

FORBES AFRICA SOCIAL MEDIA

Shell Sues Greenpeace For $2 Million After Protest On Moving Oil Platform — The Latest Clash Between The Two

Oil Prices Poised To Soar As Global Demand Hits Record High, IEA Says

OPEC And Its Allies Are Ready To Boost Production, But Here’s Why An Oil Market Recovery Isn’t Guaranteed

Oil’s Not Well: ‘Global Recession Expected To Be Deep And Lengthy’