The pandemic reduced demand for oil by nearly a third, leading to overproduction, a lack of storage facilities and, for the first time in history, oil prices fell below zero. This coincided with production cuts, as oil producer Opec and its allies such as Russia, had pledged to cut 10% of its global supplies from back in May.
This also impacted BP, one of the world’s seven oil and gas ‘supermajors’, who reported a 66% drop in earnings, as consumption of refined products had dramatically fallen. Whilst BP protected its shareholder payouts and maintained its dividend of 10.50 cents a share for the quarter, the decrease in demand has greatly impacted the energy sector in general, with job cuts and project cancellations. After widespread market volatility, it seems as though the oil price is stabilising as lockdowns in big oil consuming countries such as the US have been easing.
By Emily Digby