2020 was a difficult year for oil markets, which saw both benchmarks record historic lows amid unprecedented market volatility. The collective revenues of the world's top 14 publicly traded oil companies declined 35.4% in 2020, according to data
compiled by Anadolu Agency from their financial results. Royal Dutch Shell recorded highest year-over-year decline in revenue.
The COVID-19 pandemic and following mobility constraints, along with macroeconomic risks and global geopolitical instability, crippled demand, which dropped from 99.76 million barrels per day (bpd) in 2019 to 90.01 bpd in 2020, according to the Organization of Petroleum Exporting Countries (OPEC) Monthly Oil Report in January 2021.
In February 2020, the global oil market was dealt its first blow when COVID-19 began to spread worldwide, necessitating major oil producers, OPEC and its allies, known as OPEC+, to step in to take the market under control. However, they failed to find common ground due to divisions between OPEC's leader, Saudi Arabia, and non-OPEC leader, Russia.
Oil prices crashed due to this disagreement and after the two major oil producers opened the taps and suspended production cuts from April. The oil market then had to contend with oversupply and historic low demand, severely affecting oil prices.
Amid a coronavirus-induced supply glut, storage problems also played a significant role in exerting pressure on prices. In April, the lack of storage meant that even traders were reluctant to take physical delivery, which caused oil dumping at all costs and plummeted WTI into negative territory on April 20.
Brent crude oil, the most common benchmark worldwide, dropped to as low as $17.51 a barrel on April 21. In 2019, Brent averaged $64 and fell further by 32.8% in 2020 to average $43, which negatively affected many companies' balance sheets.
As a result, the revenues of major oil companies, including American ExxonMobil, Chevron, ConocoPhillips, Halliburton, Schlumberger, Baker Hughes and French Total, Royal Dutch Shell, British BP, Italian ENI, Norwegian Equinor, Russian Lukoil, Rosneft, and Saudi Arabian oil company Aramco markedly decreased year-on-year in 2020.
Due to low prices, the revenue of these 14 firms declined by $716.5 billion, or 35.4%, to $1.3 trillion last year, down from approximately $2.02 trillion compared to 2019, calculations from the financial results data showed.
Shell recorded the highest year-over-year decline in revenue. While the company posted revenue of $352.1 billion in 2019, this amount fell to $183.2 billion in 2020, marking a $168.9 billion, or 48%, decrease.
Other firms that posted high revenue declines were BP with a 35% loss, equating to $99.1 billion, Saudi Aramco with a 31% fall, equivalent to $90 billion, and ExxonMobil with an $83.4 billion contraction, corresponding to nearly 31%.
In 2020, Royal Dutch Shell, ExxonMobil, BP, Total, ENI, Baker Hughes, ConocoPhillips, Chevron, Equinor, Halliburton, and Schlumberger posted a cumulative net loss of $119.2 billion.
Among the 14 oil firms, ExxonMobil posted the largest loss at $22.4 billion, followed by Royal Dutch Shell with a loss of $21.7 billion and BP with a loss of $20.3 billion.
Russian companies, Lukoil and Rosneft, and Saudi Arabian oil company, Aramco, posted the largest net profits during this period.
Saudi Aramco earned $49 billion last year, although the company's net profit was approximately 44% below its earnings in 2019.
Rosneft's net profit decreased by 79.8% last year compared to 2019, reaching approximately $2.2 billion.
Despite Lukoil's profit of $205 million in 2020, it marked a massive 97.7% fall from the previous year.