Ron Bousso

LONDON, (Reuters) – Royal Dutch Shell (LON) said Thursday that rising electricity prices and inflation around the globe will impact its third quarter revenue.

Shell provided an update before the quarterly results were announced this month. Shell stated that earnings will be affected by damage from August’s Hurricane Ida by $400 Million in the third quarter.

As tight gas supplies collide with high demand for electricity in countries recovering from the COVID-19 Pandemic, natural gas and electricity prices have risen around the globe.

Shell is the top-selling liquefied gas (LNG) in the world, accounting for approximately 20% of total global demand. But its sales have fallen recently due to production problems.

Shell reported that the quarter’s liquidation is estimated to reach 7 to 7.5 Million tonnes. It was lower than 2016, which Shell explained “reflects feedgas constraints” and extra maintenance.

Company stated that the large variations margin inflows resulting from the environment of high electricity and gas prices are expected to have a significant impact on cashflow at the LNG division.

Shell’s quarterly upstream oil-and gas production declined to between 2.025 to 2.1 million barrels of crude oil per day (boed). This was due to the prolonged outage of around 90,000 boed from some of the offshore fields it has in the Gulf of Mexico.