How to buy Royal Dutch Shell (RDS.A) shares from Australia

Royal Dutch Shell Plc (NYSE: RDS.A, LON: RDSA and RDSB), better known as Shell, is an Anglo-Dutch multinational energy and petrochemicals company headquartered in The Hague in the Netherlands. The company was founded in 1907.

Shell is incorporated in the United Kingdom as a public limited company and is also listed on the New York Stock Exchange (RDS.A).

This is a complete guide to buying shares in Shell from Australia.

Royal Dutch Shell is one of the largest oil companies in the world. It engages in crude oil and natural gas exploration, production, refining, and marketing in more than 90 countries across the globe. The company owns and operates petrol stations worldwide.

Shell also markets and trades electricity, carbon-emission rights, biofuel, lubricants, bitumen, and sulfur, as well as petrochemicals for industrial use. Subsidiaries of Shell include Shell Energy, Shell Oil Company, Raizen, and Pennzoil among others.

Shell is incorporated in the United Kingdom as a public limited company listed on the New York Stock Exchange (RDS.A) and on the London Stock Exchange (LSE). On the LSE Shell has two classes of listed shares, one with the ticker RDSA and the other with RDSB. Although both shares carry identical economic rights, their cash dividends come with different tax implications. The A shares have a Dutch source for tax purposes while the B shares have a UK source for tax purposes. Cash dividends on A shares are paid in euros while cash dividends for B shares are paid in pounds sterling.

Step 1: Select a broker

You can trade shares listed on overseas markets with an online broker. You have many options in Australia.

These are just a few of the things to consider when choosing a broker.

Access to the London market (optional)

Royal Dutch Shell is listed on the New York and London stock exchanges. Many share trading apps are limited to either Australian or US markets, so check which markets your broker has access to before opening an account.

Trade without commissions

You can trade without commission on many trading platforms in Australia. This saves you a lot of money over the long term.

Fractional shares

Brokers that offer fractional shares allow you to purchase a part of the share. This allows you to diversify your holdings more easily.

Intuitive trading

Trading shares shouldn't be complicated. You should choose a broking platform that is easy to use and doesn't require a lot of learning.

Company analysis and research

A trading platform that has a strong research and analysis section can help you make informed decisions based on market updates, price history, quarterly earnings reports, etc. A few brokers offer analyst recommendations.

Step 2: Fund your trading account

You need to fund your account before you can buy shares. It’s possible that your funds will take some time to clear before trading can be started, so factor this into your plans.

Step 3: Set your budget

Shares are volatile. You should only spend money you can afford to lose. Fractional shares allow you to start small.

Step 4: Invest via an ETF or in shares

An ETF (Exchange Traded Fund), while more diverse than shares, is still safer than investing directly in an active share.

ETFs with exposure to Royal Dutch Shell include RPAR Risk Parity ETF, Avantis International Equity ETF, and SPDR S&P Kensho Intelligent Structures ETF.

Step 5: Set up an order

You can choose from a variety of order types to customise when and how many of each share should be purchased. These order types are available from many brokers.

Market order

Market orders are orders that may be bought or sold at the current market rate. The price you get at order execution might not be the same as the one offered at the time the order was placed.

Limit order

A limit order is not like a market order. It's executed at the specified price or less.

Stop limit

This type of order allows you to automatically sell your shares at a fixed price. However, if the market is moving quickly against you, the order may not be executed if the price falls past your limit price.

Stop loss

This allows you to determine the price at which to sell. This is often used to protect a trade against market volatility. You could, for example, set up a stop loss at US$125 per share. Your stop loss order will automatically be executed if the price drops below that level and your order will be filled at the next available market price.

Step 6: Place your order

After you have chosen a broker and decided what type of investment you want, you can place an order.

When you buy shares in a company, either to hold long-term or to benefit from speculating on price fluctuations, you need to keep a track of the company’s performance and its share price movements.

Track Shell's performance

Keep an eye on how Shell performs as well as its share price movements. Shell is also a dividend-paying company. As part of tracking performance, you want to keep an eye on the company’s financial fundamentals to have confidence that it performs to your expectations.

Watch for developments in the global energy sector

The global energy landscape is undergoing major shifts. As with many industries, the COVID-19 pandemic and the economic crisis that followed it have caused unprecedented disruption in the energy landscape. According to McKinsey, that path to recovery remains uncertain: "... the world’s energy systems are going through rapid transitions that are triggered by simultaneous shifts in technological development, regulations, consumer preferences, and investor sentiments".

Competition

Shell’s top competitors include Petrobras (NYSE: PBR), Chevron (NYSE: CVX), BP (LON: BP), Saudi Aramco, and ExxonMobil (NYSE: XOM).