shell’s last resort

Posted by Pierce in business | Tagged , , , , , | Comments Off on shell’s last resort

In the recent fire as cited here, shell have no alternative but to force majeures the 11 contracts it has from the ill-fated refinery. The effect of these is that some contract is now not fulfil-able at selling windows making the contract price void and buyer would have to realign it’s contract windows and supply chain sequence to make sure that the commodity will not be interrupted.

This means that these 11 buyers would need to source from hedged stocks which may cost higher to procure on the spot. Most of these contract will be those purchaser who is carrying out fuel rationing such as airlines. With this effect, profit is trimmed or maybe running into a lost for these contract fulfilment.

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