The coronavirus pandemic has exposed some hard truths to the world’s largest oil and gas majors, energy analysts have told CNBC, with many reeling after historic second-quarter losses laid bare the financial frailty of the industry.
“Big Oil” companies, referring to the world’s largest oil and gas firms, posted huge losses in the three-month period through to June as coronavirus lockdown measures coincided with an unprecedented demand shock.
The results were expected to mark the low point of what has already been touted as potentially the worst year in the history of global oil markets.
The devastating economic impact of the coronavirus outbreak has prompted energy majors to slash shareholder distributions, rack up increasing levels of debt, and sell or write-down the value of their assets.
The chief executive of Saudi Aramco, Amin Nasser, sought to reassure market participants about the outlook for the energy industry earlier this month.
Speaking during an earnings call with investors shortly after the world’s largest oil company posted a 50% fall in profits for the first half of its financial year, Nasser said: “The worst is likely behind us.”
Yet, as energy industry peers warn of significantly lower oil and gas prices through to 2050, others are not so sure.
