Why flexibility and diversification are key to the evolution of big oil companies – The National

Why flexibility and diversification are key to the evolution of big oil companies – The National

While Covid-19 induced lockdowns dented company profits, climate change, electric vehicles and the advent of other non-oil technologies have long term implications for energy giants





























Big oil companies need to be flexible and diversify in the wake of climate change, electric vehicles and other technologies. Reuters 











Probably not since the Second World War have the big oil companies released earnings under such turbulent and unpromising circumstances. Their big losses and write-downs are shocking but unsurprising. Are they just the reflection of bad times, or indicative of flawed strategic choices, or do they point to a grim long-term future for the oil super-majors?



In the second quarter, lockdowns under the pandemic drove world oil demand to fall 16.4 million barrels per day, as estimated by the International Energy Agency, a drop far beyond any historical experience.



US oil prices famously went briefly negative. Brent crude, the international benchmark, tumbled to average $29 per barrel in the second quarter, from $67 per barrel at the end of last year, and that would have been far worse without the steep production cuts of the Opec+ alliance. The international