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The Crisis In The Oil And Gas Sector Advances With Job Cuts, Declining Investments And Prolonged Recession, Affecting Companies Like ConocoPhillips, Chevron And BP.
The wave of job cuts is hitting the oil and gas industry hard, as reported by AEPET (Petrobras Engineers Association) this Wednesday, September 10. In the United States, ConocoPhillips announced that up to 3,250 employees could be laid off by Christmas, while Chevron has already reduced around 8,000 positions since February. BP also announced 4,700 cuts. The scenario reveals a crisis that is not isolated, but rather a reflection of an ongoing global recession.
According to Mike Wirth, CEO of Chevron, “the way to protect the maximum number of jobs for most people is to keep ourselves competitive.” This statement highlights the pressure companies face to balance costs and maintain sustainable operations amidst market instability.
Global Recession And Falling Oil Prices
The recession is exacerbated by the decline in crude oil prices. After spiking with Russia’s invasion of Ukraine, prices have halved. Analysts at Wood Mackenzie project that Brent could dip below US$ 60 a barrel by early 2026, remaining at that level for years.
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This price represents a challenge especially for shale producers in the U.S., whose viability requires prices around US$ 65 per barrel, according to the Dallas Federal Reserve. For Kirk Edwards of Latigo Petroleum, “this is not a problem exclusive to Conoco. It is a warning sign for the entire U.S. oil and gas industry.”
The response from companies has been varied. Many are shelving or selling projects, while others are turning to outsourcing and digital tools to reduce costs. Saudi Aramco, for example, raised US$ 10 billion through the partial sale of its pipeline network. Meanwhile, Malaysia’s Petronas cut 5,000 jobs.
According to Andrew Gillick from Enverus, “AI is offering operators new ways to optimize in a challenging market.” This technological adaptation shows that, in addition to job cuts, there is an attempt to modernize processes and seek efficiency.
Declining Investments And Future Risks
The effects of the recession go beyond the present. The forecast is that global capital investments will fall by 4.3% this year, totaling US$ 341.9 billion, the first contraction since 2020. This is already impacting U.S. production, which is set to contract for the first time since 2021.
For Roe Patterson of Marauder Capital, the warning is clear: “U.S. oil producers are facing difficulties… which is costing jobs. The problem is that our oil production may not be available when the U.S. needs it in the future.”
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