Brent crude oil fell more than $3 to a fresh four-year low under $75 a barrel yesterday after OPEC decided not to cut production, despite a huge oversupply in world markets.
Oil prices have fallen by more than a third since June as increasing production in North America from shale oil has overwhelmed demand at a time of sluggish global economic growth.
Ministers from OPEC countries had been discussing whether to agree a production cut at their meeting in Vienna.
With oil prices falling to a four-year low, the development of two frontier basins in north-west Europe, the Barents Sea and the West of Shetland, is likely to be postponed and further progress will require cost reductions, according to an analyst with consulting firm GlobalData. Both Chevron and Statoil are continuing to delay their final investment decisions for the projects, which have 240 and 545m barrels of oil equivalent of recoverable reserves respectively.
Matthew Ingrams, European upstream analyst at GlobalData, warned: “The implications of plummeting oil prices will be felt most heavily by the UK and Norway’s governments, highlighting the ripple effect of petroleum production on state tax revenues.”