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BP Stops Spot Diesel Sale in Germany Over Europe Supply Concern
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BP plc (BP - Free Report) and Shell plc (SHEL - Free Report) have restrained from providing spot diesel cargoes in the German market in the last two weeks for concerns over supply shortages across Europe, per a report by Reuters.
The companies had been actively supplying diesel products for the past two months. However, Russia’s invasion of Ukraine has had widespread repercussions in the energy sector. It is believed that some people were buying large amounts, while others might have been holding products as part of logistic strategies.
Russia is responsible for a significant portion of Europe's diesel imports. In response to the country’s military campaign in Ukraine, European oil majors are self-sanctioning or avoiding Russian oil, leading to a volatile market across crude and products.
Per Reuters, about 34% of Germany's crude oil came from Russia last year. Although domestic production can be maintained currently, diesel and heating oil supplies are becoming increasingly scarce. Shell already informed the German customers to prepare for reduced spot volumes of petrol, diesel, heating oil and lubricants.
Shell operates two of Europe’s largest oil refineries — the Netherlands and Germany. Earlier this month, the company purchased a cargo of Russia’s main export crude grade at a reduced price. The oil major apologized after it faced criticism over buying the cargo of Russian crude after many other firms started to curb their purchases.
Shell also declared that it would not renew any Russian term contracts and close its service stations, aviation fuels and lubricants operations in the country. The company further said that it would eventually find substitutes for the Russian supply but stressed that it might take some time, leading to lower output at some of its refineries.
BP recently announced that it is withdrawing its stake in the Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country. It was one of the biggest foreign investors in Russia before exiting its position. The decision can hit BP financially by $25 billion and slash almost half of its hydrocarbon reserves.
BP is also planning an exit strategy from its other businesses in Russia, which involves three JVs, with a carrying value on its books of $1.4 billion. The company’s board believes that these decisions are in the best long-term interests of all shareholders.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 12.3% compared with the industry's 37.8% growth.
PDC Energy, Inc. is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. In the fourth quarter of 2021, the company returned approximately $110 million through dividends and share repurchases.
PDC Energy’s earnings for 2022 are expected to grow 66.7% year over year. As of Dec 31, PDC Energy had $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.
SM Energy Company (SM - Free Report) is one of the most attractive players in the exploration and production space. SM estimated its 2021-end proved reserves at 492 MMBoe, suggesting a year-over-year increase of 22%.
SM Energy’s earnings for 2022 are expected to surge 261.1% year over year. As of Dec 31, 2021, SM had cash and cash equivalents of $332.7 million. It had net debt of $2,081.2 million. SM had total liquidity of more than $1.43 billion and long-term debt to capital of 50.2%.
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BP Stops Spot Diesel Sale in Germany Over Europe Supply Concern
BP plc (BP - Free Report) and Shell plc (SHEL - Free Report) have restrained from providing spot diesel cargoes in the German market in the last two weeks for concerns over supply shortages across Europe, per a report by Reuters.
The companies had been actively supplying diesel products for the past two months. However, Russia’s invasion of Ukraine has had widespread repercussions in the energy sector. It is believed that some people were buying large amounts, while others might have been holding products as part of logistic strategies.
Russia is responsible for a significant portion of Europe's diesel imports. In response to the country’s military campaign in Ukraine, European oil majors are self-sanctioning or avoiding Russian oil, leading to a volatile market across crude and products.
Per Reuters, about 34% of Germany's crude oil came from Russia last year. Although domestic production can be maintained currently, diesel and heating oil supplies are becoming increasingly scarce. Shell already informed the German customers to prepare for reduced spot volumes of petrol, diesel, heating oil and lubricants.
Shell operates two of Europe’s largest oil refineries — the Netherlands and Germany. Earlier this month, the company purchased a cargo of Russia’s main export crude grade at a reduced price. The oil major apologized after it faced criticism over buying the cargo of Russian crude after many other firms started to curb their purchases.
Shell also declared that it would not renew any Russian term contracts and close its service stations, aviation fuels and lubricants operations in the country. The company further said that it would eventually find substitutes for the Russian supply but stressed that it might take some time, leading to lower output at some of its refineries.
BP recently announced that it is withdrawing its stake in the Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country. It was one of the biggest foreign investors in Russia before exiting its position. The decision can hit BP financially by $25 billion and slash almost half of its hydrocarbon reserves.
BP is also planning an exit strategy from its other businesses in Russia, which involves three JVs, with a carrying value on its books of $1.4 billion. The company’s board believes that these decisions are in the best long-term interests of all shareholders.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 12.3% compared with the industry's 37.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
BP currently has a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
PDC Energy, Inc. is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. In the fourth quarter of 2021, the company returned approximately $110 million through dividends and share repurchases.
PDC Energy’s earnings for 2022 are expected to grow 66.7% year over year. As of Dec 31, PDC Energy had $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.
SM Energy Company (SM - Free Report) is one of the most attractive players in the exploration and production space. SM estimated its 2021-end proved reserves at 492 MMBoe, suggesting a year-over-year increase of 22%.
SM Energy’s earnings for 2022 are expected to surge 261.1% year over year. As of Dec 31, 2021, SM had cash and cash equivalents of $332.7 million. It had net debt of $2,081.2 million. SM had total liquidity of more than $1.43 billion and long-term debt to capital of 50.2%.