Oil giants announce steep cutbacks

Royal Dutch Shell and Total this morning announced plans to sharply cut spending and freeze share buyback plans.

Why it matters: The moves signal how cratering demand from COVID-19 and the collapse in prices are upending the outlooks for companies large and small.

Driving the news: Shell is cutting planned capital spending this year to $20 billion or lower, compared to the pre-crisis estimate of $25 billion.

• It also plans to cut operating costs by $3 billion to $4 billion over the next 12 months.

Meanwhile, Total said oil at $30 per barrel means a roughly $3 billion hit to capital spending, which means a new target of under $15 billion this year.

• The France-based multinational also said it can save $800 million in operating costs compared to 2019.
• They're just the latest in a string of oil companies — including ExxonMobil and a number of independent U.S. shale producers — to unveil deep cuts of late.

Go deeper: Coronavirus could lead to a wave of defaults for oil companies