DW discusses Big Oil splutters — how will it survive the energy transition? Plummeting oil prices amid the coronavirus pandemic sparked the biggest oil industry crisis in a century. Already facing pressure to commit to the energy transition, can these goliaths adapt in time?
In April, the price of oil turned negative for the first time in history, just after the coronavirus pandemic hit. As lockdowns were ordered across the world, demand for black gold plummeted, prompting producers to literally pay buyers to take the commodity off their hands.
The price collapse was exacerbated by the Saudi-Russian price war which blew up around the same time, after Moscow refused to moderate oil production to keep prices at a reasonable level. Overproduction, particularly by US shale producers, amplified the effects of the worst oil crisis in decades.
In the first nine months of this year, Shell, Exxon Mobil, Chevron, BP and Total made a total loss of $36.4 billion (€30.6 billion), compared with last year’s $50 billion in profit. As investors took flight, the oil majors were forced to slash costs.