The scale of that result shows the importance of the trading division to the oil major in a year when weak demand and prices hit other parts of the business. Shell took advantage of wild price swings and a market situation that allowed it to make money by storing oil to sell later for a profit.

The company’s earnings from oil trading in 2020 beat the highest ever net income at Vitol Group, the world’s largest independent trading house, which made a record $2.3 billion in 2019. Vitol has yet to disclose 2020 results.

Shell only revealed the earnings from oil trading in its annual report, and left power, natural gas and liquefied natural gas trading out. Analysts suspect it was able to make similar profits from those businesses. The result is a boon to the company amid the energy transition as it leans on its trading prowess to push through less-profitable renewables.

Shell’s B shares were up 0.4% at 1,510.8 pence as of 1:29 p.m. in London on Friday.

“Trading operations are dismissed by the market as unsustainable” and don’t add a “serious” premium to a company’s valuation, Sanford C. Bernstein analyst Oswald Clint said in a note. However, the disclosure shows “real value creation which will transfer over into renewable power.”

BP Benefits

Rival BP Plc made a similar disclosure last year when its Chief Executive Officer Bernard Looney revealed trading typically boosted returns by 2 percentage points a year, suggesting it makes annual profit of around $2.5 billion. The London-based major is also expanding in renewables, while scaling back its oil production.

Bernstein estimates that BP earned $2.9 billion from oil and products trading last year and a further $1 billion from gas. For Shell, it estimates LNG trading brought in an additional $2.6 billion. The Anglo-Dutch major is the world’s largest trader of the liquefied fuel.

The two European energy giants are best known for their oil and gas operations, but they’re also two of the biggest commodity traders. Between them, Shell and BP move more than 20 million barrels of oil and refined products a day, much more than the volumes they pump out of the ground.

Yet trading has always been kept a closely guarded secret, with executives typically only making mentions of the units’ performance with general platitudes.

In the second quarter of last year, when supermajors’ balance sheets were savaged by the impact of the coronavirus on oil prices, their trading units saved them from posting quarterly losses. Still, valuations for European oil companies remain in the doldrums and investors are still not rewarding them for climate strategies that remain unproven.

“Each day investors understand the rationale and the proposition more, but understandably they want to see results, they want to see execution,” BP’s Looney said Thursday in a webinar.