Mar 24, 2020 - Energy & Climate

Chevron joins other majors making big cutbacks amid cratering oil demand

Ben Geman

Chevron gas station — Photo: Justin Sullivan/Getty Images

Chevron this morning said it's slashing its planned 2020 capital spending by $4 billion — roughly 20% — and suspending share buybacks, making it the latest multinational giant to announce cutbacks as global oil demand craters.

The state of play: Chevron, the second-largest U.S.-based oil company, said around $2 billion of the cuts would be focused on shale, largely in the Permian Basin region.

More broadly, companies of various sizes are announcing spending cuts as they grapple with the stunningly fast changes in oil markets.
European-based multinationals Shell and Total recently unveiled deep cuts and suspension of share buybacks.

The big picture: The travel and economic freeze from coronavirus, combined with the collapse of the Saudi-Russia output-limiting deal, is upending the oil sector as prices have collapsed.

Analysts are racing to keep up with how much the global appetite for oil will fall this year, with many projections seeing a loss of millions of barrels per day.
A number of projections show a near-term decline in the 10 million barrel per day range.
For instance, the firm Thunder Said Energy sees a Q2 drop of 11.5 million barrels per day and a full year-over-year decline of 6.5 million.

Go deeper: AI energy startup Worlds snags Chevron and Petronas as backers

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Chevron joins other majors making big cutbacks amid cratering oil demand

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