Oil Majors Brace for Dividend Drought as Sub-$70 Crude Bites

Core Insights - Sub-$70 oil prices are pressuring major oil companies, leading to potential cuts in shareholder payouts and a reevaluation of $100 billion in annual returns [1][2][3] Group 1: Financial Implications - Global oil majors are expected to reduce dividends as oil prices remain below $70 per barrel, with most needing prices above $80 to maintain current dividend levels [3] - The five leading supermajors (Chevron, ExxonMobil, BP, Shell, and TotalEnergies) plan to spend $108.5 billion on shareholder returns this year, slightly lower than the projected $112 billion for 2024, despite Brent averaging $70 per barrel this year, down from $80 in 2024 [4] Group 2: Operational Adjustments - US oil firms, including ExxonMobil and Chevron, are focusing on job cuts, with ExxonMobil announcing layoffs of 20-25% of its global workforce [4] - Chevron is reportedly seeking to divest $2 billion in pipeline assets in Colorado's Denver-Julesburg shale basin, stemming from its 2020 acquisition of Noble Energy [6] Group 3: Market Developments - Excelerate Energy has been appointed by the Iraqi government to develop the country's first floating LNG import terminal, aimed at enhancing domestic power generation [7] - ExxonMobil is in discussions to re-enter Gabon with an exploration agreement potentially covering six offshore blocks [8] Group 4: Supply Dynamics - OPEC+ has agreed to a modest output increase of 137,000 barrels per day starting in November, maintaining the same increment as in October, amid differing views among top producers [10]