As areas of the British economy reopen following the Coronavirus pandemic, oil producers continue to face depressed prices.
The unprecedented impact of COVID-19 on the global economy, specifically oil and gas sectors, forced large producers such as BP and Shell to reduce the value of their assets by tens of billions of pounds.
The declining demand for gas and oil over the past few months has placed further pressures on the sector, forcing some large drillers to delay plans to find more resources. While this was initially exacerbated by Saudi Arabia and Russia who increased their production, flooding the market with cheap crude oil, prices of Brent oil have now begun to rise again – though they remain a third lower than they were at the beginning of 2020.
Although reductions in oil and gas are necessary for the fulfilment of the Paris Agreement on climate change by the end of the decade, the sector remains unprepared for this shift away from fossil fuels. Britain continues to rely on natural gas for roughly a third of its electricity, and many cars continue to burn petrol or diesel. How Britain will proceed remains uncertain.
