Oil

According to Q4 2020 earnings report released this week, oil behemoths Shell and BP suffered major losses in 2020, with Royal Dutch Shell earnings falling 87 per cent, and BP recording its first annual loss in a decade.

2020 was a devastating year for oil demand, perhaps best illustrated by oil prices turning negative in April, for the first time in history, as producers began to pay buyers to take stock off their hands, over fears storage would run out. 

Whilst oil prices did quickly rebounded into positive figures, the extent of damage dealt by the pandemic in 2020 was reiterated this week, as some of the world’s oil giants reported damaging earnings reports.

BP reported that its annual net operating loss for 2020 reached $20.3 billion (€16.9 billion) as profits in Q4 fell 96 per cent.

Similarly, Shell posted a major net loss for the year, losing $21.7 billion (€18.1 billion).

US oil giant Exxon Mobil also suffered a loss exceeding $20 billion, reporting that they experienced a net loss of $22.4 billion (€18.6 billion).

Responding to the reduced demand imposed by various pandemic mitigation measures, oil producers have committed to reducing oil supply, and as a result, crude oil prices, as judged by benchmarks Brent and West Texas Intermediate both price barrels as over $50 a barrel. 

Royal Dutch Shell’s chief executive officer, Ben van Beurden, downplayed the long term impact of the losses, conceding that whilst “2020 was an extraordinary year”, Shell has taken “tough but decisive actions to demonstrated highly resilient operational delivery.

The company is “coming out of 2020 with a stronger balance sheet, ready to accelerate [its] strategy and make the future of energy”, he reported.

However, in the short term, the impact of the pandemic on the oil industry is expected to persist. In 2021, Shell forecast a net debt of $2.4 – 2.8 billion (€2 – 2.3 billion).

Related

The end of pesky liquids restrictions in airport hand luggage? UK airports could ditch rules by 2024

November 24, 2022
by Helena Grech

The UK Government is considering rolling out more advanced scanners by mid-2024, sources told the BBC

Paris overtakes London as most valuable stock market in Europe

November 15, 2022
by Robert Fenech

The UK is the only G7 nation whose economy is still smaller than it was before the pandemic

Primark goes online, rules out deliveries…for now

November 14, 2022
by Robert Fenech

The British retail giant has opted for a click-and-collect system