Like many other sectors, the energy industry in its many facets has also been noticeably affected by the pandemic. The resulting decline in electricity demand has been exacerbated by an oil price war between Saudi Arabia and Russia, which began on March 8, 2020 and led to a global stock market crash. Members of the OPEC+ alliance were looking to agree on production cuts for the time of the pandemic in order to keep oil prices at a healthy level. When the dialogue ended in disagreement, Saudi Arabia set to increase extraction volumes even further, making benchmark crude oil prices freefall and pushing the global oil and gas sector into crisis. This has already resulted in all oil supermajors slashing planned spending for the year by some 20 percent, while smaller companies are expecting to be hit the hardest.
The current crisis threatens the survival of many oil and gas companies, especially in the U.S. where shale oil and gas production has always been less profitable than the production of conventional oil and gas in countries like Saudi Arabia and Russia. On June 29, U.S. fracking pioneer Chesapeake Energy became the first major company to file for bankruptcy. The global shale industry will likely have to reduce employment by some 32 percent this year, which compared to an employment cut of 42 percent suffered between 2014 and 2016.
However, the fossil fuel sector is not the only one afflicted. Forecasts for solar capacity additions in 2020 were also revised down.
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