Shell Takes Major Loss from Russia Exit

Shell will write down as much as $5 billion following its decision to exit Russia, more than previously disclosed.

After revealing post-tax impairments of between $4 billion and $5 billion, the company’s shares fell 1.2% in London trading this week.

Shell, whose market capitalization is around $210 billion, had previously said the Russia write-downs would not pass $3.4 billion. 

The increase was due to additional potential impacts around contracts, write-downs of receivables, and credit losses in Russia, Shell said in a statement.

Benchmark oil prices have soared to an average of more than $100 a barrel in the quarter, their highest since 2014, while European gas prices hit a record high.

The start of 2022 has been one of the most turbulent periods in decades for the oil and gas industry, as Western companies rapidly pulled out of Russia, severing trading ties and winding down operations following Moscow's invasion of Ukraine.

What does this mean for me? 

As a stock trader, you can expect the stock price of high-profile companies that exited Russia to take a hammering in the near term. 

Analysts expect that upcoming earnings reports will reflect that moral conviction comes at a cost to the bottom line.

After the Shell news, many more Western companies that abandoned Russia are expected to disclose the negative financial impact of their decisions. This information will be useful as you fine tune your portfolio.