NEW YORK -- Two American oil giants lost more than $9 billion in the second quarter as the pandemic kept households on lockdown, cutting a gaping hole in a once-thriving business as the need for oil diminished around the world.
Exxon Mobil Corp. lost $1.1 billion in the second quarter as the Irving, Texas-based oil producer brought in $32.6 billion in revenue, less than half of what it brought in at the same period last year.
Chevron Corp. lost $8.27 billion during the quarter, a sharp contrast to the $4.3 billion it earned a year ago. The San Ramon, Calif.-based company brought in $13.49 billion in revenue, about a third of what it brought in last year.
The quarter was one of the worst on record for the oil industry. The price of a barrel of benchmark U.S. crude fell below $0 in April, a stunning downfall that had never been seen in the industry. Producers had been pumping far more oil than the world was using as global travel all but shut down, and storage tanks were filling up. Petroleum consumption fell to a more than 30-year low in April, according to the U.S. Energy Information Administration.
Oil prices have recovered somewhat since, but have been stuck at about $40 a barrel for weeks, fetching 30% less than a barrel did a year ago and well below what most producers need to make ends meet.
As a result, the U.S. oil industry lost more than 100,000 jobs since February, with 45,000 of those jobs shed by upstream oil and gas companies in Texas alone, according to Rystad Energy, a consulting firm.
"Simply put, the demand destruction in the second quarter was unprecedented in the history of modern oil markets," said Neil Chapman, senior vice president at Exxon, on a conference call with investors Friday. "To put it in context, absolute demand fell to levels we hadn't seen in nearly 20 years. We've never seen a decline of this magnitude and pace before, even relative to the historic periods of demand volatility following the global financial crisis and as far back as the 1970s oil and energy crisis."
Exxon expects gasoline and diesel fuel consumption to rebound to levels similar to last year in the fourth quarter, but jet fuel will take longer to recover, Chapman said.
Exxon announced in April that it would cut its capital spending budget by 30%, to $23 billion, and its cash operating expenses by 15%, in 2020. The company is on track to exceed that goal and is exploring other ways to cut expenses, including evaluating its workforce around the world, Chapman said.
The pandemic is also making some of Exxon's work more expensive as it tries to keep employees safe. "We've had to charge planes to move our rotating operating staff all over the globe without the availability of commercial planes," Chapman said. "We've had to lease hotels in multiple cities to quarantine our folks before they start their 30-day rotations."