Weak oil prices shrivelled quarterly profit at Exxon Mobil and Chevron, compelling both companies to rethink operations and plan for what many expect to be a sustained period of cheap crude.
Earnings at Exxon and Chevron, two of the world’s largest oil producers, also missed analysts’ expectations, adding to concerns that perhaps executives had not acted quickly enough to mitigate the impact of an over-50-per cent drop in oil prices since last summer.
The results also highlighted how smaller and more nimble US shale oil companies had slashed costs faster and more aggressively than global majors. Some shale producers have cut back drilling by 60 per cent or more.
Exxon’s profit fell by more than half, with the biggest drop in its exploration and production business, where earnings slumped by nearly $6bn.
Chevron’s profit plunged 90 per cent, a starker drop and one exacerbated by a $2.22bn (£1.42bn) loss in its exploration and production division.
Though production grew at both companies, they missed the estimates of many analysts who had expected the energy giants to pump more.
Still, the two companies benefited from their refining divisions, which make gasoline and other fuels.
Both companies stressed their ability to weather the price doldrums and emerge stronger.