"It was a historic week for the oil industry, potentially marking a turning point, at least for the corporate strategies of the oil majors.
More curbs on the supply side do add some bullish sentiment to the market, although the impacts on the fundamentals are not necessarily going to unfold in the near term.
But in the wake of the huge blows to the oil majors this week, more than a few analysts spoke about growing odds of a supply crunch in the years ahead.
Shell loses in court:
Royal Dutch Shell (NYSE: RDS.A) lost a landmark legal case in a Dutch court, which, if it stands, will require 45% cuts in GHG emissions by 2030.
The case is seen as a warning sign for the rest of the oil industry, signaling legal exposure to Scope 3 emissions (those burned by end-users).
Court ruling could shrink Shell.
The court ruling ordering Shell to speed up its plans to cut greenhouse gas emissions could lead to a 12% decline in the company's energy output, including a sharp drop in oil and gas sales, according to Reuters.
More litigation related to emissions is likely.
The win is being viewed as a shocking and powerful statement by shareholders as to their displeasure with the oil giant for not doing enough to mitigate the effects of its business on the climate.
And For Exxon, it could mean big changes are coming.
Exxon must cut production, Engine No. 1 says.
Engine No. 1 said that ExxonMobil (NYSE: XOM) must cut oil production.
“They need to position themselves for success,” Charlie Penner, of Engine No. 1, told the FT.
“You would certainly believe that would mean less oil and gas production going forward.”
The hedge fund’s founder, Chris James, added:
“Watching that meeting yesterday was such a perfect example of how they don’t realize the world has changed.
Chevron shareholders vote for Scope 3.
Chevron (NYSE: CVX) also lost a notable shareholder vote, with a measure requiring a target to reduce Scope 3 emissions passed by more than 60% of shareholders, another major rebuke to the oil industry.
... On the heels of the string of losses suffered by Exxon, Chevron, and Shell, France’s Total (NYSE: TOT) is facing growing scrutiny from investors over its corporate strategy.
Biden defends Alaska oil project.
President Biden’s administration has backed the Willow oil project in Alaska in a new filing by the Department of Justice.
... Moody’s: Credit risks growing for Big Oil.
This week’s climate-related actions in boardrooms and courtrooms involving some of the largest international oil companies signal a rising threat to the sector, Moody’s Investor Service said in a comment on the industry.
“A new court ruling against Royal Dutch Shell and shareholder votes at ExxonMobil and Chevron highlights the increasing credit risk for major oil producers over concerns about climate change,” Moody’s said.
DHS to propose regulations for pipelines:
The U.S. Department of Homeland Security is preparing regulations on cyber security for oil and gas pipelines, a move that could beef up security in the wake of the Colonial outage."