In 2020, oil experienced its worst crisis in its history
Audio 01:57
British oil giant BP.
REUTERS / Arnd Wiegmann
By: Altin Lazaj
5 mins
2020 was a fatal year for oil.
The health crisis caused an unprecedented shock to the oil sector and probably started its decline.
Publicity
Remember, in April, when the price of US oil briefly went into negative territory, at -37 dollars per barrel, a first in history!
In effect, suppliers paid buyers to get rid of their stock of crude.
At the same time, a barrel of Brent, the oil from the North Sea, was around $ 20, unprecedented since the 1990s. The pandemic and the containment measures had caused a sharp slowdown in the world economy , causing a fall in demand and an overabundance of supply which led to this plunge in the price of black gold.
Since then, prices have slowly recovered, but they are still very low today compared to pre-crisis levels.
Weakened, the oil majors have accumulated record losses, laid off workers and thus reduced their investments in exploration and production by 20 to 35%.
Some shale oil producers in the United States have even gone bankrupt, others have fallen prey to bigger than themselves and have been bought out.
The crisis has also hit the poor countries heavily dependent on oil manna;
this is the case, for example, of Venezuela, Iran, Angola or Algeria.
Their income is greatly reduced because of the low prices of crude.
2020 was also a year of transformation for the European oil giants.
Shell, Eni, BP or Total have announced an acceleration of their investments in renewable energies, estimated at 170 billion dollars by 2030. They are also committed to carbon neutrality by 2050. Unlike the American companies which believe Even in the future of oil, the European groups have well understood the fact that in the future, the demand for crude will fall due to the energy transition and the fight against climate change.
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