Shell Share Price Faces Sustained Pressure If Oil Drops to $60

The Shell share price has been on an upward trajectory due to high oil prices. However, some investors are wondering what would happen if oil prices dropped back to $60 a barrel.

A look at history suggests that when Brent crude falls towards $60 in previous downturns, the shares have come under sustained pressure. For example, in 2021, when oil prices fell to around $60, Shell's shares were trading at 1,344p. In contrast, today they are valued at over £3,500.

While analysts note that Shell would still benefit from elevated margins if crude oil prices drop below $60, the stock is expected to fall in such a scenario. The company's market cap of over £200bn and price-to-earnings ratio of 10.4 also suggest some potential for a decline.