FT News Briefing
Big oil braces for a rough year
Apr 29, 2025
The oil industry is bracing for a challenging year, facing declining profits and shifting market dynamics. Spain and Portugal struggle with a massive power outage that's affecting renewable energy efforts. Meanwhile, the surge in the Swiss franc poses complications for the central bank, raising concerns about possible negative interest rates. Amid these events, major oil companies are recalibrating their strategies to navigate the economic turbulence and upcoming earnings reports.
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Quick takeaways
- The oil industry is facing its worst year since the pandemic due to declining profits and increased competition from OPEC's supply adjustments.
- Spain's massive power outage has prompted a state of emergency, highlighting vulnerabilities in energy infrastructure amid the push for renewable sources.
Deep dives
Challenges Facing Big Oil
The oil industry is experiencing a significant downturn, facing its worst year since the pandemic, as reflected in the anticipated earnings reports. Previously benefitting from high oil prices due to geopolitical events, the sector has seen profits decline steadily since peaking in 2022. Factors contributing to this fall include new tariffs imposed by the U.S. and OPEC's decision to increase oil supply, which coincided with growing concerns about global economic slowdown. As the industry braces for earnings reports, companies are expected to discuss strategies such as cost-cutting and reduced spending to navigate the challenges ahead.
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