The energy industry’s earnings are under pressure and some companies are having to borrow to pay dividends. In April, Shell cut its dividend for the first time since World War II , upending investors’ expectations that major oil companies would provide reliable dividends. Shell said Tuesday that its gearing level—net debt as a percentage of total capital—is expected to rise 3% because of lower asset values. In April, Shell’s gearing was 29%, above the company’s target of 25%. “Following the dividend cut, we think Shell, even in the current environment, will deleverage quickly, and this should open the door for greater distributions to shareholders,” said Biraj Borkhataria, co-head of European energy research at RBC Capital Markets. Shell expects benchmark Brent oil prices to average $35 a barrel this year and $60 a barrel in the long term. Shell’s shares traded down 1.7% on Tuesday. Write to Sarah McFarlane at […]