Oil giants Shell and Total report profits despite staggering earnings declines

• The big drop stems from lower prices and sales, and lower refining margins, but it was partly offset by gains in their trading divisions and cost cuts, Shell said.
• Total said its profit fell to $126 million, down 96% from the same quarter in 2019 — and like Shell, trading performance cushioned steep losses elsewhere.

The intrigue: "Although better known for their oil fields, refineries and filling stations, Shell, Total and also BP Plc run huge in-house oil trading businesses that can handle more than 25 million barrels a day of crude and products," Bloomberg reports.

Why it matters: The quarterly numbers are one marker of how COVID-19 — as well as climate policies, activist pressure and other forces — is shaking up the sector's outlook in the near- and long-term.

Yes, but: Shell's profits don't include a $16.8 billion write-down on the value of its assets, though Shell had previously warned it could have been up to $22 billion, due to downward revisions of future price forecasts.

• And Total yesterday announced a $8.1 billion write-down.

What's next: ExxonMobil and Chevron report Q2 earnings Friday before markets open.

Go deeper:

• Shell’s second-quarter profit slumps 82% on coronavirus hit to oil prices, energy demand (CNBC)
• Shell and Total escape underlying losses on strong oil trading (Financial Times)