Shell posts mammoth loss amid fears BP results could be even worse next week

The extent to which the oil industry has been damaged by coronavirus was laid bare today after Shell posted a mammoth loss.

The oil giant posted a loss of $18.4 billion (£14.2 billion) for the second quarter after writing down the value of its assets by $17 billion. In the second quarter last year the company posted a $3.5 billion profit.

The write down - which was first divulged at the end of June - came after the company slashed its expectations for oil prices as demand for fuel has dropped off a cliff as countries across the globe went into lockdown and economic activity ground to a halt.

Shell has been forced to slash production as a result.

The big question analysts say is when demand for oil might come back given that air travel remains limited and fears about a coronavirus second wave are mounting.

Earlier this month chief executive Ben van Beurden said demand may never fully recover.

Stuart Lamont, investment manager at Brewin Dolphin, added: “The biggest talking point is the huge loss the company has incurred - largely as a result of revised pricing. The pandemic’s influence is likely to remain far-reaching, with Shell saying it may still need to curtail or reduce production later in the year to mitigate lack of demand - an indication that there may still be more pain to come.”