World Economy

Oil Job Losses Climb

Oil Job Losses Climb Oil Job Losses Climb

Still nursing deep financial wounds from the oil-market collapse, the petroleum industry has shed roughly 25,000 jobs around the world in the last two months, cutting upstream workers that analysts say will likely be difficult to replace when the downturn ends.

Job losses in recent weeks have increased the industry’s losses to more than 233,000 since the slump in crude prices took hold late last year, according to energy recruiter Swift Worldwide Resources, Fuelfix reported.

Given the speed at which companies are cutting payrolls—a rate that hasn’t slowed down yet—Swift expects layoffs to grow to more than 250,000 this year and to increase again next year if oil prices languish at current levels.

Swift CEO Tobias Read said there’s no sign of an immediate turnaround in the oil and gas job market and the situation “is likely to get worse.”

Crude prices crumbled this time last year after the Organization of Petroleum Exporting Countries signaled its member countries—which collectively produce about a third of the world’s oil—wouldn’t give up a drop of oil production to balance the oil market and bring up prices that had plummeted as international markets filled up with an oversupply of crude.

Prices rose somewhat in the spring but the market tumbled again in July and August, with US crude hovering around $45 a barrel in recent months. Analysts had said the recent decline would trigger another wave of job cuts, which had been hefty earlier this year. US crude traded for $40.91 a barrel in mid-day trading Tuesday on the New York Mercantile Exchange.

In the last two months, US oil producers Devon Energy and Marathon Oil Corp. announced a combined 400 job cuts, while US oil service supplier Superior Energy Services said it would shed 4,760 jobs. Canadian oil producer and refiner Husky Energy said it cut 1,400 jobs and Maersk Oil, the oil and gas production arm of Danish shipping conglomerate AP Moller-Maersk Group, is cutting 12% of its global headcount, around 1,250 jobs.

Read said the jobs will be hard to replace once the market recovers. He says his company’s estimate uses conservative assumptions in tallying job losses, using both publicly available data and keeping an “ear to the ground” in cases where losses are hard to track.