The lack of need for fuel during the current pandemic has led to a surplus of oil, and oil companies are concerned about their survival.
According to Business Insider, BP’s CEO Bernard Looney said in a statement, “Our industry has been hit by shocks on a scale never seen before.”
On April 20, USA Today reported that U.S. benchmark crude oil fell into “negative territory” for the first time in history, and this sharp decline was “caused by the unusually low trading volumes.”
The article added that “the negative price signifies there’s virtually no market for oil and sellers must pay up to store crude supplies.”
With the record-breaking low in crude oil stocks, many big oil companies are in a tailspin.
Employees are also facing financial challenges as a result of the decreased market.
The BBC reported, “the predicted job losses represent about one in five of the 151,000 people employed directly or indirectly by the sector.”
The crude oil companies have never faced financial devastation this immense. One event, though minuscule, by comparison, was the oil crisis of the 1980s, which resulted in the laying off of one in seven oil industry employees in the Houston area, according to The New York Times. However, the current crisis may be even more devastating.“In the last five weeks, at least 6,000 energy workers in Texas have been told they’re either laid off or furloughed,” Houston Public Media reported on April 29, 2020. “More than 4,000 of them are in Houston.”