Oil majors face billions in added shipping liabilities as tanker freight rates surge
Quarterly results show that soaring tanker freight rates have forced Shell, TotalEnergies, Eni and Equinor to record large non‑cash shipping‑related liabilities and margin pressure. Shell reported a $5.4 bn increase in shipping lease liabilities for Q3 and total lease liabilities up $7.7 bn year‑to‑date, while its CFO said rates are about ten times last year’s levels. TotalEnergies said freight costs rose to roughly $25 per barrel, cutting its liquids price realization by $6 per barrel. Equinor’s crude, products and liquids unit posted an adjusted operating loss of $96 m in Q3, a swing from a $355 m profit three months earlier.
Why it matters
The added lease liabilities and higher freight costs compress refining and trading margins, potentially reducing earnings for the affected majors. Investors should watch the impact on cash flow and debt metrics as the shipping market remains tight.
Key facts
- 1Shell disclosed a $5.4 bn non‑cash increase in its shipping lease liabilities during the third quarter. splash247.com
- 2Shell’s total shipping lease liabilities have risen by nearly $7.7 bn since the beginning of the year. splash247.com
- 3Shell CFO Sinead Gorman said freight rates between the Middle East and China are now around ten times their levels a year ago. splash247.com
- 4TotalEnergies CEO Patrick Pouyanné said shipping costs have climbed to approximately $25 per barrel, pressuring liquids price realizations by about $6 per barrel. splash247.com
- 5Eni reported third‑quarter refining adjusted operating profit of €730 m, partially offset by higher freight costs. splash247.com
- 6Equinor’s crude, products and liquids business recorded an adjusted operating loss of $96 m in the third quarter, versus a $355 m profit in the prior three months. splash247.com
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.