The trend has been months in the making, but it reached a high point on Wednesday when Shell Plc announced what amounts to a pivot back into hydrocarbons and a promise to deliver higher returns to shareholders.Gone are the days when Shell aimed to reduce its oil production every year, and lavishly invest in loss-making electricity businesses.

Now, Wael Sawan, the company’s new-ish chief executive officer, has promised that it “will invest in the models that work – those with the highest returns that play to our strengths.” Translation: more spending on fossil fuels, less solar and wind. That’s music to shareholders and a public rebuttal of the strategy of his predecessor, Ben van Beurden. After all, if Shell will now only invest in what works, the corollary is that previously it was investing in businesses that didn’t.

Sawan has now put some of those operations on sale and canceled many others. Shell faces an uphill battle to convince shareholders that it’s serious. The dividend — increased 15% to about 33 cents per share starting this quarter – is still well below the 47 cents when Van Beurden slashed it in April 2020. At the time, it was the first cut for Shell since World War II.

Another round of share buybacks will also help, as will the promise to reduce capital expenditure. At the midpoint of it guidance, Shell will target capex of $23.5 billion in 2024 and 2025; that’s down from $25 billion in 2023. Shell said that the combination of a focus on higher-yielding investments and “stronger capital and cost discipline” would allow it to return to shareholders 30% to 40% of its cash flow from operations, up from 20% to 30% previously.

The increase would help Shell close a valuation gap with its US rivals. Trading at less than three times enterprise value to underlying earnings, Shell is significantly cheaper than Exxon Mobil Corp. and Chevron Corp., which trade at around five times.

But investors can be forgiven their skepticism. Too many zigs and zags in the last five years by not just Shell but BP Plc and TotalEnergies SE, have left shareholders unsure of what comes next. The reaction to the announcement was lackluster. Shell shares barely budged.

Is the latest swing in the European Big Oil industry’s strategy truly the last? Unlikely. But for now, at least, in large part because European governments have woken up to the dangers of reducing investment in fossil fuels in the wake of Russia’s isolation, the ESG trend has lost momentum.On Wednesday, the International Energy Agency’s annual update predicted oil demand growing in the next five years, even if at a slower rate than historically from 2026 onward due to more efficient internal-combustion vehicles and, at the margin more electric cars.

By 2028, the final year of the IEA’s forecast horizon, global oil demand will reach nearly 106 million barrels a day, up from 102 million in 2023. Note that according to the IEA, to meet the net zero emissions by 2050 targets, oil demand would need to drop to 75 million barrels a day by 2030.