Big Oil recorded one of its worst years in history because of the coronavirus pandemic that pushed their financial results deep into negative territory.

Earlier this week, BP reported a net loss of $5.7 billion for 2020, citing oil and gas price weaknesses and demand destruction by the pandemic.

Exxon, for its part, booked the biggest loss in its modern history, at $20 billion, including an impairment charge of $19.3 billion.

“The past year presented the most challenging market conditions Exxon Mobil has ever experienced,” Exxon’s chief executive Darren Woods said, as quoted by the Wall Street Journal.

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Indeed, things must have been tough for the biggest US oil companies—reports emerged earlier this week that Exxon had discussed a merger with peer Chevron. Meanwhile, everyone was cutting costs by shedding non-core assets and tightening capital spending plans.

The energy industry was among those hardest hit by the pandemic, along with real estate and financial services. However, unlike other industries, the oil and gas sector also faces growing pressure from regulators and shareholders to make bigger commitments to a lower-carbon future.

BP, for instance, has pledged to cut its oil and gas production by 40 percent by 2030, and Exxon just announced it would set up a Low Carbon Solutions unit to commercialize plans for more than 20 new carbon capture and sequestration (CCS) opportunities around the world. All Big Oil majors have made commitments, the European ones generally more ambitious than their U.S. peers.

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“An unprecedented demand collapse has forced the hand of Big Oil to right-size their dividends and capital frames; meanwhile plans for energy transition have been accelerated,” said JP Morgan analyst Christyan Malek, as quoted by the Wall Street Journal.

On the flip side, demand for oil is beginning to improve, and some expect it to rebound to pre-pandemic levels before this year’s end thanks to mass vaccination and the consequent—albeit gradual—return to a semblance of pre-pandemic normal.

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