Big Oil faces a ‘good sweating’; some aren’t fit
For the last few years, oil industry giants have enjoyed a bonanza but the tailwind has now turned into a headwind
WHEN John D Rockefeller wanted to punish a rival, he cut prices to force them to operate at a loss. The father of the modern oil industry had a name for it: a “good sweating”.
A century later, the Organization of the Petroleum Exporting Countries and allies (Opec+) is giving Big Oil the modern equivalent of Rockefeller’s time-tested tactics.
Not everyone will be fit enough for it. For the last two-and-a-half years, Big Oil has enjoyed a bonanza, profiting from the impact of Russia’s invasion of Ukraine and Opec+’s tight control of the market. High prices inflated cash generation, leading to bumper payouts to shareholders – via, above all, buybacks.
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