Exxon Mobil posted its worst loss in its modern history after the pandemic slammed headlong into a global crude glut to savage almost every part of the oil giant’s business.
The disastrous collapse in crude prices bled Exxon’s production division while Covid-19 lockdowns strangled demand for everything from jet fuel to plastic wrap, hobbling the company’s sprawling refining and chemical units.
Exxon’s woes are emblematic of the broader threats menacing the petroleum industry in what is turning out to be the deepest crisis of its 161-year history. International titans that raked in record-breaking profits during the first decade of the century have now been reduced to widespread job cuts, belt tightening and heavy borrowing to cover dividends and other outlays.
Exxon’s 26-cents per-share loss was better than the 64-cent average loss from analysts in a Bloomberg survey. Earlier on Friday, Chevron Corp. posted its worst quarterly loss in at least three decades and warned that the pandemic may continue to drag on earnings.
Downstream Disaster
The worst-ever crude crash came at a vulnerable time for Exxon because it had just embarked on an aggressive, multibillion-dollar rebuilding program. Two straight quarterly losses, combined with almost $15 billion in annual dividend commitments, will translate into what Goldman Sachs Group Inc. analysts warned will be an unprecedented debt load.
After slashing $10 billion in capital spending and freezing dividends, Chief Executive Officer Darren Woods may be running out of levers to pull. The company is cutting between 5% to 10% of its U.S. employees that are subject to performance evaluations, people familiar with the matter told Bloomberg News in June.
