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IF Insights: Oil giants see Iran war windfall, bill lands somewhere else

International Finance Business Desk — Thu, 06 Aug 2026 00:00:46 +0000

Five Western oil majors booked close to USD 47 billion in net profit in the three months to June. ExxonMobil made USD 14.5 billion, more than double a year earlier and its best quarter since 2022, which works out at roughly USD 160 million a day.

Chevron made USD 12.1 billion, the highest quarterly figure in its history and almost four times the USD 2.5 billion it managed in the same quarter of 2025. Shell reported USD 10.8 billion attributable to shareholders, up 196%. TotalEnergies posted USD 6 billion in adjusted net income. BP, reporting last, doubled its net profit to USD 3.91 billion.

None of these companies discovered a new field, cracked a new technology or cut a transformative deal. What happened, on February 28, was that the United States and Israel attacked Iran, Tehran began attacking shipping in the Strait of Hormuz, and about a fifth of the world’s seaborne oil stopped moving.

Where the money actually came from

The first mechanism is the simplest one in the industry. Once a barrel is in production, most of the cost of producing it is already sunk. Lifting costs, depreciation and overheads barely move when the price does, so almost every extra dollar on the benchmark falls through to the bottom line.

The scale of that extra dollar was extraordinary. Brent averaged USD 69.82 a barrel in January. By late April it had peaked at USD 126.41, the highest print in the past year.

Chevron’s realised Brent price for the second quarter came in at USD 104, up 53% on the USD 68 of a year earlier. Its upstream division earned USD 8.2 billion, roughly triple the year-ago result, on production that was not dramatically different.

The second mechanism is less obvious and, this time, more important than usual. Refining margins exploded. The conflict damaged Gulf refining and export infrastructure and stranded product cargoes, while demand outside the region held up.

Refiners with plants beyond the blast radius ran flat out into a shortage they had not created. Chevron’s downstream earnings went from USD 737 million to USD 4.9 billion, a jump of more than 500%, and it achieved that while processing less crude and selling fewer products than a year ago. Exxon’s downstream contribution reached USD 5.5 billion on record diesel output.

ALSO READ | Iran war: Higher fuel costs weigh on UK carriers’ earnings outlook

Shell ran its refining network at 102% utilisation, above nameplate capacity, and posted its strongest products result of the decade. Tom Seng, who teaches energy finance at Texas Christian University, has made the point that integrated companies owning both wells and refineries were the best placed of anyone to capture this market.

The third mechanism is integration itself. TotalEnergies chief executive Patrick Pouyanne told markets: In this tense and volatile environment, the strategy of TotalEnergies is once again demonstrating its relevance, taking advantage of our integrated model and the diversification of our portfolio.

A company that produces crude, refines it, trades it and sells the fuel captures margin at four points instead of one.

ALSO READ | Iran war: With just weeks of jet fuel stocks left, how vulnerable is Europe?

American producers also gained a straightforward logistical windfall, with United States crude and product net exports hitting a record 5.8 million barrels a day in April as buyers cut off from the Gulf went shopping in Texas.

Chevron chief executive Mike Wirth said the company was “kind of firing on all cylinders”. US shale is following the same pattern, with ConocoPhillips, Occidental, EOG Resources, Diamondback and Devon all heading for their strongest results since 2022.

Whether any of it lasts

The short answer is no, and the more useful evidence for that is not in the forecasts but in what the companies are doing with the cash.

In 2022, after Russia invaded Ukraine, a windfall of this shape would have triggered a drilling boom. This time it has triggered almost none.

Exxon spent USD 13.0 billion in cash capital expenditure across the first half, almost exactly the USD 12.5 billion of a year earlier, while returning USD 9.4 billion to shareholders in the quarter alone. Chevron returned USD 6.5 billion.

TotalEnergies prioritised paying down debt, cutting gearing to 13%, and lifted its dividend by 5.9%. Among the shale producers, only Diamondback has explicitly tied higher prices to higher activity. Boards that lived through the busts of 2015 and 2020 are treating this as a cash event rather than a growth signal, which is a fairly clear statement about how long they expect it to last.

The price has already given them reason. Brent fell below USD 75 in late June after Washington and Tehran signed a memorandum of understanding aimed at reopening the strait, and has traded in the low 80s in early August as talks on reopening the strait continued. That is a swing of more than 40 dollars from the April peak inside four months.

Vandana Hari of Vanda Insights described the June collapse bluntly, noting that “crude’s slide is entirely sentiment-driven” and that the market was pricing the best case for reopening.

Forecasts cluster well below current levels for next year. The World Bank expects Brent to average USD 86 in 2026 and USD 70 in 2027. JP Morgan sees USD 75 next year, Morgan Stanley USD 80.

Refining is the most fragile leg. Those margins exist because the world lost processing capacity faster than it lost demand, and capacity comes back. Several import-dependent countries are already reassessing whether to build their own refineries, which points to oversupply on a three to five year view.

There is one counterargument. Inventories in OECD countries are the lowest since 2003, and restocking after a draw that size takes several quarters even once flows normalise.

The shock has also forced markets to price the concentration of supply in the Persian Gulf as a standing risk rather than a tail risk, and that premium sits in long-dated forwards. Prices are likely to fall. A return to the pre-war world is a different proposition.

Who is paying

This is a transfer, not a creation of value. A supply shock raises the cost of producing nearly everything at once, because oil is embedded in transport, packaging, fertiliser, plastics and power generation, and it hands households nothing in return.

American drivers paid USD 2.98 a gallon on February 27. By early August they were paying about USD 4.09, a rise of nearly 40%. The International Monetary Fund (IMF) now expects global headline inflation of 4.7% in 2026, up from 4.1% in 2025 and driven mainly by energy and food.

Its April forecast cut global growth to 3.1%, though the July update revised that up by 0.3 points as supply fears eased. UNCTAD has documented the burden falling hardest on the 65 net oil-importing vulnerable economies, where households spend a far larger share of income on fuel and food.

The picture is not uniformly bleak. Research from the Atlanta and Dallas Federal Reserve banks suggests the inflationary hit in advanced economies is more moderate than the 1970s comparison implies. Energy has fallen from 13.3% of American GDP to 5.7% over four decades, and household spending on energy from 9.8% to 3.8%.

That is precisely why the distribution matters more than the average. A shock that barely registers in national accounts can still be brutal for a delivery firm, a rural commuter or a low-income family, because the pain is concentrated rather than shared.

For businesses, the harder problem is planning. Firms surveyed by the Atlanta Fed described conditions as manageable now but risky ahead, and the risk is that fuel costs get written into wages, contracts and pricing, at which point the shock stops being temporary.

The politics catches up

On August 3, United States President Donald Trump broke with his usual position on the industry and said of Exxon and Chevron that “they’re making too much money based on a shortage”, adding that they should give some of it back and cut pump prices.

The American Petroleum Institute responded that prices reflect global supply, demand and uncertainty around shipping lanes rather than the conduct of any single company, which is largely correct and also beside the point being made.

Portugal has already approved a 33% windfall tax on 2026 profits above a 2024 to 2025 baseline. Democrats in the United States Congress have introduced bills to levy a per-barrel tax on large producers and redistribute the proceeds.

Patrick Galey, head of news investigations at Global Witness, said in May that it was galling to watch oil giants raking in “obscene amounts of money” while people feared rising bills.

ALSO READ | The Hormuz blockade is not just about the oil

The industry’s counterargument is a real one. Exxon’s Darren Woods told investors that “we canceled investments that we had planned for Europe” after the last round of windfall taxes.

Shon Hiatt of the University of Southern California argues that “the incentives to take risk and invest in production are drastically reduced” by such levies, which can eventually mean less supply and more scarcity. Critics respond that Britain’s post-2022 production decline had several causes, including ageing fields.

Third-quarter results will almost certainly be strong again, and in the United States they land shortly before the midterms. The question that outlives the price spike is what happens to the money. On the evidence of the first half, the answer is that it goes to shareholders.

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BP divestment: Kuwait-backed consortium in race to acquire energy giant’s solar unit

International Finance Business Desk — Wed, 29 Jul 2026 00:00:19 +0000

British energy giant BP is reportedly in advanced talks to sell its solar business, Lightsource, to a consortium backed by Kuwait’s sovereign wealth fund, as the venture sharpens its focus further on oil and gas to bolster returns.

Green energy-focused private equity firm ⁠Qualitas Energy and Wren House, the infrastructure arm of Kuwait’s sovereign wealth fund Kuwait Investment Authority, have teamed up for the bid, claimed a report from the Financial Times (FT).

BP has been doubling down on efforts to simplify its operations, while refocusing on traditional oil and gas to reduce debt, boost profit and return on investment after a miscalculated foray into renewables under Bernard Looney in 2020, under which the company promised to reduce its oil and gas production by 40% by 2030 and aimed for zero net emissions by 2050.

With new CEO Meg O’Neill firmly taking over the proceedings, BP has been having a busy July in terms of making its organization lean. Last week, it signed an agreement to sell its minority interests in more than 10 ‌companies in ⁠its venture arm, under its USD 20 billion divestment plan.

BP’s Lightsource, which was central to a hefty impairment charge flagged in early 2026, has already spun off its offshore wind business, apart from abandoning plans to ⁠build biofuels and hydrogen plants in Amsterdam, Australia, and the United Kingdom, respectively.

The energy major will also be selling its Austrian mobility, ‌convenience, and electric vehicle (EV) charging businesses to Volenergy AG. The move will be the fourth in line, after sales of similar businesses in the Netherlands in 2025, Turkey in 2024, and Switzerland in 2022.

The agreement with Volenergy AG, expected to be completed by the 2026 end, includes 250 BP-branded retail sites as well as electric vehicle charging ‌infrastructure. BP ⁠will sell 100% of its shares in BP Retail Austria GmbH (subject to regulatory approvals) and its shares in three non-operated joint ⁠ventures.

Volenergy AG operates the largest network of fuel stations in Switzerland, with more than 730 ⁠locations. It acquired BP’s Swiss retail network in 2022.

O’Neill, who started in the top job in April, said a couple of weeks back that BP needs to prioritize financial discipline by simplifying its portfolio, cutting costs, and tightening capital spending, while refocusing on its core oil and gas investments.

The British major’s venturing arm, BP Ventures, which began in 2007, had 27 companies ⁠in its portfolio till the divestment took the fifth gear in July. These included projects related to artificial intelligence (AI), electric vehicles, and hydrogen.

Since O’Neill has taken over BP’s leadership reins, the energy major has also gone through the unpleasant removal of its chair, Albert Manifold, over bullying allegations. Amid the instability in its board, the venture is currently working to rebuild investor trust by cutting costs and debt.

The CEO reportedly wants to be more selective in its investment decisions ⁠as it works through its strategy reset after the painful renewables experiment.

“We need to be deliberate about where we invest and where we don’t. We need to make fewer, better choices and hold ourselves to account,” O’Neill said in a LinkedIn post on the 100th day of her being in the role.

She has laid out three priorities to make BP simpler and more valuable: operational excellence, improved accountability, and strong discipline in costs, cash, and capital.

BP’s reorganization into two business segments, upstream and downstream, from three, went into effect at the start of this month. As per O’Neill, the move will help reduce complexity at the energy major, with trading connecting the ‌upstream ⁠and downstream businesses.

The current divestment strategy involves prioritizing debt reduction in order to improve cash flow and reshape the overall portfolio further.

The start of O’Neill’s tenure also coincided with the Iran war, which has disrupted the global energy market with little shipping ⁠traffic going through the crucial maritime chokehold called the Strait of Hormuz. The crisis, however, helped boost BP’s results in the first quarter, with profit more than doubling to USD 3.2 billion.

“BP’s trading and shipping teams worked with its refining unit to deliver an extra 50 ⁠million liters of diesel from the Cherry Point refinery in Washington state to Sydney to help increase supplies in Australia,” O’Neill said on LinkedIn.

The energy major’s Castellon refinery in Spain has also increased jet fuel output by 30% ahead of Europe’s summer travel season in response to the crisis.

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Business leader of the Week: Albert Manifold’s ouster and BP’s never-ending boardroom instability

International Finance Business Desk — Wed, 03 Jun 2026 00:04:56 +0000

BP, or famously known as British Petroleum, has been in utter doldrums. In the last week of May 2026, the energy major’s chair, Albert Manifold, got removed by the company’s board over allegations and ‘concerns’ about his governance standards, oversight and conduct. The company has now asked its senior independent director Amanda Blanc to lead the search for the next chair, while Ian Tyler will be taking up Manifold’s responsibilities on an interim basis.

Blanc, also a CEO of British insurer Aviva, oversaw Manifold’s appointment at BP in October 2025. However, multiple figures ⁠from London’s financial centre, including large investors in the oil giant, told the Financial Times that this time around, Blanc would lack the support from shareholders to make a second appointment to the post.

Manifold’s inglorious exit has added another chapter in BP’s leadership instability. In 2023, former CEO Bernard Looney was fired ⁠after lying to the board about his personal relationships with colleagues. His successor, Murray Auchincloss, left abruptly in December 2025.

While former Woodside CEO Meg O’Neill joined the British energy major immediately, she also became the venture’s fifth CEO since 2020. Although her role has been to accelerate the company’s shift away from renewable energy to refocus on oil and gas, right now what BP needs is stability at the top, along with clear policy direction.

BP’s gas and low-carbon business chief William Lin will leave the organisation as well. However, as per the reports, this has to do with O’Neill’s reorganisation efforts that will turn the business into two main units of downstream and upstream, bundling oil and gas production, with the goal of making BP simpler and more valuable.

BP vs Manifold
The immediate reason behind Manifold’s removal was his alleged act of aggression with different colleagues across the BP. The board had reportedly received enough information following a whistleblower report to ascertain that there was a pattern of “unacceptable behaviour” from the chair.

Manifold, while interacting with Reuters, disputed the accusations and commented, “I was removed without warning and without explanation. I dispute entirely the characterisation of my conduct, and I will not allow a false narrative to go unchallenged.”

It is also worth remembering that Manifold had the backing of activist hedge fund Elliott, which has built up a stake of around 5% in BP. The chair’s role at BP was Manifold’s first-ever leadership job in the energy industry. Before joining the British giant, he was the chief at building materials producer CRH, where he helped the company to reshape its operational portfolio. He also helped the business to move its primary listing from Ireland to the United States, a move that helped CRH’s share prices to go up.

However, Manifold’s journey as BP’s chair was anything but smooth. Under his watch, BP’s board shrank. Shell finance chief Simon Henry, who only joined the company in September 2025, was among those quitting at short notice. The April 2026 annual general meeting (AGM) saw the board failing to get two of its resolutions accepted by shareholders, and Manifold’s appointment as chair got less support than typical.

Despite the board putting up a united show back then, proxy adviser Glass Lewis held Manifold accountable for BP’s decision to exclude a resolution filed by climate activist group Follow This and thus recommended a vote against him. His appointment, however, was confirmed by around 82% of votes, well below the typical near 100% tally for directors.

Another infamous chapter was Manifold’s alleged clash with Henry. As per the Wall Street Journal (WSJ), the issue was the fellow director’s handling of sensitive talks related to a potential deal. Manifold privately accused Henry of overstepping his authority and excluding other directors from communications, while Henry denied any mishandling of talks, arguing that Manifold ‌was ⁠mischaracterising conversations.

Hitting back to the WSJ, Manifold’s spokesperson said, “Assertions that he accused Mr Henry of overstepping his authority or excluding fellow board members ⁠from communications are false.”

Manifold, post his removal as the BP chair, said not everyone at the oil major shared his priorities to cut costs and boost efficiency, while acknowledging being too pushy for the change. However, he again denied committing any misconduct.

“Is it possible that in my determination to drive change on costs, performance, the balance sheet and shareholder communications, I pushed hard and challenged people directly? Yes, it is. What I do not accept is that lies can be told about me, nor that anyone should be allowed to hide behind anonymity when ⁠commenting on my time at BP,” he remarked.

Quoting BP’s internal sources, a Reuters report claimed that Manifold met with activist shareholder Elliott Management during his tenure without telling fellow board members directly. While these ⁠interactions were not technically a breach of any specific rule, they created an impression of him acting unilaterally, reportedly displeasing the board.

While Elliott wanted BP to cut costs, shift focus and spending from renewable projects to oil and gas and simplify its organisational structure, Manifold, on the other hand, ⁠wanted to accelerate the revamp. Most of the organisational changes got implemented in recent months.

Does BP have the most volatile boardroom?
As per Lindsey Stewart, director of institutional investor content at Morningstar, “At this point it’s fair to say BP has the most volatile boardroom of the oil supermajors. With a resurgent share price so far this year, BP should be taking credit for the rewards of its strategic reset. Instead, the company is on its third CEO and now its third chairman in under three years. It’s clear that getting a grip on corporate governance and strategy at the company must be a priority of the interim chair and his eventual successor.”

Legendary investment manager Neil Woodford, on the other hand, minced no words for BP. As per him, Manifold is the third chairman the company has been through in three years, and this sort of makes BP look “ungovernable”.

“Shareholders should look away from the churn at the top and instead at who is doing the churning,” Woodford remarked in a LinkedIn post, as he continued, “people should focus on the decisions made by non-executive directors rather than the chairman himself.”

“Most of the non-executive directors who pushed Manifold out have sat on that board throughout the entire period. The same people who have hired and fired chairmen and chief executives in quick succession remain comfortably in place. And the man they have just removed was the architect of BP’s turnaround strategy and the person who recruited the new chief executive in the first place. The board kept itself and discarded the one figure actually trying to change the business,” he concluded.

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Petrobras to hire new FPSO for the Buzios field, starts bidding process

Pritam Bordoloi — Wed, 05 May 2021 09:55:03 +0000

Brazil-based oil giant Petrobras is looking to hire new FPSO for the Búzios field, in the Santos Basin pre-salt and has started the bidding process, media reports said. Named the P-80, it will not only be one of the largest oil production units operating in Brazil, but one of the largest in the world. It will have a capacity to process 225 000 bpd of oil and 12 million m3/d of gas. Discovered in 2010, The Búzios field is the largest deepwater oilfield in the world and is Petrobras’ most productive asset.

Last month, Petrobras acquired BP’s stake in six offshore blocks in the Foz do Amazonas Basin. The financial details of this deal were not disclosed. BP transferred its 30 percent stake in the offshore assets to Petrobras. This means now Petrobras owns a 100 percent stake in the blocks.

In this regard, Petrobras said, “The transaction is in line with the 2021-2025 Strategic Plan, which outlined new exploratory fronts outside the Southeast basins, and is part of the company’s portfolio-management process, prioritising investments in world-class deep-water and ultradeep-water assets.”

Earlier this year, five Petrobras board members stepped down following the removal of its chief executive officer (CEO) Roberto Castello Branco. Brazilian President Jair Bolsonaro ousted the CEO following a string of fuel price increases.

Last year, Petrobras has set a new record for annual output. The oil company pumped an average of 2.28 million bpd in 2020. It broke its previous record of an average of 2.23 million bpd, which was set in 2015.

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Brazil’s oil production falls 6% in Q1: Report

International Finance Business Desk — Tue, 27 Apr 2021 09:29:42 +0000

Brazil’s oil production during the first three months of the year dropped by 6 percent, according to National Petroleum Agency (ANP), media reports said. Brazil produced an average of about 2.8 million barrels per day (bpd) in the first quarter. While in the previous year, Brazil produced around 3 million bpd on average.

Brazilian oil giant Petrobras’ oil production was also down during the same period. It produced 2.1 million bpd in the first quarter, down by 5 percent.

Earlier this month, Petrobras acquired BP’s stake in six offshore blocks in the Foz do Amazonas Basin. The financial details of this deal have not been disclosed. BP transferred its 30 percent stake in the offshore assets to Petrobras. This means now Petrobras owns a 100 percent stake in the blocks.

Last year, Petrobras had set a new record for annual output in 2020. The oil company pumped an average of 2.28 million bpd in 2020. It broke its previous record of an average of 2.23 million bpd, which was set in 2015.

According to Petrobras, it was greatly helped by the performance at the Buzios Field and improved corrosion-treatment efforts at its subsalt fields. It said that, “The records demonstrate good operational performance despite the challenging scenario of 2020, with greater focus on world-class assets in deep and ultra-deep waters where Petrobras has displayed a large competitive advantage.”

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Petrobras acquires BP’s stake in six offshore blocks in Foz do Amazonas Basin

Pritam Bordoloi — Wed, 07 Apr 2021 07:41:10 +0000

Brazilian state-owned oil giant Petrobras has acquired BP’s stake in six offshore blocks in the Foz do Amazonas Basin, media reports said. The financial details of this deal have not been disclosed. BP transferred its 30 percent stake in the offshore assets to Petrobras. This means now Petrobras owns 100 percent stake in the blocks.

Last month, five Petrobras board members stepped down following the removal of its chief executive officer (CEO) Roberto Castello Branco. Brazilian President Jair Bolsonaro said he was ousting the Petrobras CEO following a string of fuel price increases.

Petrobras revealed the decision of its board members to step down through a securities exchange filing. The five directors were appointed by the government, which holds seven of Petrobras’ 11 board seats, but investors viewed them as staunch opponents of government interference in the publicly traded company.

Earlier this year, it was also reported that Petrobras has set a new record for annual output in 2020. The oil company pumped an average of 2.28 million bpd in 2020. It broke its previous record of an average of 2.23 million bpd, which was set in 2015.

“The records demonstrate good operational performance despite the challenging scenario of 2020, with a greater focus on world-class assets in deep and ultra-deep waters where Petrobras has displayed a large competitive advantage,” Petrobras said.

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BP agrees to sell 20% stake in Oman’s Block 61 for $2.6 bn

Pritam Bordoloi — Tue, 02 Feb 2021 06:42:47 +0000

Energy giant BP is planning to sell a 20 percent stake in Oman’s Block 61 for a fee of around $2.6 billion, media reports said. The stake will be sold to Thailand’s state-owned PTT Exploration and Production. The deal is part of BP’s greater plan to sell $25 billion worth of assets by 2025.

In this regard, BP’s Chief Executive Bernard Looney told the media, “We are committed to BP’s business in Oman – this agreement allows us to remain at the heart of this world-class development while also making important progress in our global divestment programme.”

Last year, BP’s stock prices crashed to a 25-year low after its chief executive Bernard Looney announced its new climate strategy. In September, Bernard Looney announced BP’s plans to turn the company from a predominant oil and gas company to an integrated energy company. He and his new management team gave more than 10 hours of presentations over three days last week, in a bid to show the world that the oil and gas giant could adapt to a low-carbon future without sacrificing returns.

In this regard, Aviva Investors global head of governance Mirza Baig told the media, “Investors remain skeptical, particularly as this move is being forced on the company by climate change.”

“BP’s challenge lies in the building up of its skillset in renewable energy solutions and a competitive advantage in its chosen areas that allows investors to believe they can deliver attractive financial returns from the capital allocated,” Baig added.

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Petronas mulls exiting Gharraf oilfield in Iraq: CEO

Pritam Bordoloi — Mon, 19 Oct 2020 09:58:29 +0000

Malaysia-based state-owned oil and gas company Petronas is mulling exiting the Gharra oilfield in Iraq, according to its president and group chief executive officer (CEO) Tengku Muhammad Taufik Tengku Aziz. It is speculated that the depleting oil prices are forcing the oil major to consider this decision.

Petronas operates the Gharraf oilfield in Iraq with a 45 percent stake. While Japan Petroleum Exploration owns a 30 percent interest, the remaining 25 percent interest is owned by North Oil Company.

The Gharraf oilfield produced between 90,000 bpd to 100,000 bpd last year. However, operations in the field were suspended in mid-March earlier this year due to the Covid-19 pandemic. It was reported that the production resumed in July at a rate of 50,0000 bpd.

Tengku Muhammad Taufik Tengku Aziz told the media, “Under the $40/barrel scenario, I’d be the first to admit that under all possible lenses, we’ve had to trigger a review of our intent to stay in Gharraf. I can only say watch this space … we are in consultation with the host authorities to see whether the [oilfield’s] economics can be improved but of course, over and above that, we need to make sure it makes sense from the sustainability lens as well. If we can make it better, cleaner, we’ll still pursue it.”

It is reported that Petronas, Makarim Gas Development Limited (OQ) and BP had announced the start of production from the second phase of the Ghazeer natural gas field located in Oman. Petronas is working on the project through its subsidiary PC Oman Ventures (PCOVL).

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Exxon points to a historic shift in the oil industry

Pritam Bordoloi — Tue, 13 Oct 2020 09:20:40 +0000

Major oil producer Exxon Mobil, which was once the most valuable public oil and gas company, has now been superseded by wind and solar producer NextEra Energy. Although the company still remains as one of the largest oil companies in the world, it is now valued at $142 billion, while NextEra was recently valued at $145 billion. This shift points to a huge transformation in investments from oil and gas to renewable energy.

The fortune transition for Exxon is due to the growing awareness in climate change and the need to emphasise on renewable energy sources. The widespread adoption of electric vehicles has in fact impacted the oil industry, including Exxon’s trajectory over the years. Also, the crumbling crude prices and the oil price war between Saudi Arabia-led OPEC and Russia this year have fuelled the existing circumstances

The comparison between Exxon Mobil’s declining presence and the rise of NextEra Energy has raised important questions for investors. The contrasting fortunes of two energy companies would encourage investors to rethink their investment strategies for the future. In turn, this could possibly lead to a dramatic shift in investment in the oil industry transition to a more sustainable future in renewable energy.

Exxon said “Significant actions are needed at this time to improve cost competitiveness,” on the back of its plan to cut up to 1,600 jobs in Europe. But to make matters worse, it is reported that the company is planning investments to increase its carbon emissions by 17 percent in the coming five years. However, the move is expected to help the company double its earnings during that period. Interestingly, the plan comes at a time when its European counterparts such as Total and BP are seeking to reduce their carbon emissions to become sustainable energy companies in the future. The International Energy Agency (IEA) recently said that global oil demand is still set to flatline rather than peak in the coming two decades.

The depleting demand due to the coronavirus pandemic has forced Exxon’s stock to tumble significantly this year. The company’s record-breaking second-quarter loss saw its exclusion from the Dow Jones Industrial Average and the third quarter is anticipated to be more disastrous on the back of the protracted pandemic. In essence, if Exxon records a loss for the third quarter, it would be the first time that the oil behemoth has reported a third consecutive loss in the last four decades. The company is expected to post its third-quarter result on October 30, 2020.

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BP announces new climate strategy, stock prices crash to a 25 year low

Pritam Bordoloi — Mon, 28 Sep 2020 07:22:51 +0000

British multinational oil and gas company BP’s stock prices crashed to a 25-year low after its chief executive Bernard Looney announced its new climate strategy, media reports said.

Bernard Looney recently announced BP’s plans to turn the company from a predominant oil and gas company to an integrated energy company. He and his new management team gave more than 10 hours of presentations over three days last week, in a bid to show the world that the oil and gas giant could adapt to a low-carbon future without sacrificing returns.

In this regard, Aviva Investors global head of governance Mirza Baig told the media, “Investors remain skeptical, particularly as this move is being forced on the company by climate change.”

In recent times, major oil giants across the globe has come under immense scrutiny because of their limited efforts to fight climate change. Also, factors such as depleting global oil prices and the coronavirus pandemic has severely impacted oil companies.

Earlier this month, BP released its annual Energy Outlook report, which states that oil demand may have already peaked in 2019, as the rise in renewable energy intersects with the impact of the coronavirus pandemic.

It is reported that BP sees its return on average capital employed in its large oil trading business at around US$2.5 billion annually.

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