Oil Majors Under Pressure: Declining Profits and a Shifting Energy Landscape 

Oil Majors Under Pressure: Declining Profits and a Shifting Energy Landscape

The world’s leading oil companies are facing a difficult 2025. Profits are down sharply, crude prices are falling, and strategic missteps are compounding problems across the sector. What was once a dependable pillar of the global economy is now grappling with serious structural challenges. 

A major driver of the downturn is the continued drop in oil prices. Global demand has weakened, especially from industrial giants like China and Germany, while supply remains high. Brent crude has slipped to around $60 per barrel, a steep fall from previous highs. This price pressure has hit the bottom line of companies like Shell, BP, and ExxonMobil, all of which reported significant profit declines in early 2025 (Financial Times, 2025). 

The crisis has been deepened by poor strategic decisions. Several oil majors have overcommitted to costly exploration projects in unstable regions, while others have delayed meaningful investment in renewable energy. As the global push toward cleaner energy accelerates, companies slow to adapt are increasingly being left behind. Analysts warn that without a stronger pivot toward diversification, these firms risk losing relevance (Bloomberg, 2025). 

Geopolitical uncertainty is also weighing on the industry. OPEC’s internal divisions have made it difficult to coordinate production cuts, weakening the cartel’s influence on prices. Meanwhile, new trade restrictions from the United States have created further instability in oil markets (Reuters, 2025). 

There is also growing pressure from investors and regulators to transition away from fossil fuels. Environmental, Social, and Governance (ESG) concerns are driving capital away from traditional energy companies, making it harder for them to finance long-term projects. This has added urgency to the call for oil majors to modernize their business models. 

While oil will remain important in the short term, the direction of the global energy market is clear. Companies that fail to embrace cleaner, more flexible strategies may survive the current downturn—but not the next. 

References: 

• Bloomberg. (2025, April 20). Big Oil’s Earnings Tumble as Prices Slide and Costs Rise. Retrieved from https://www.bloomberg.com 
• Financial Times. (2025, April 22). Oil industry braces for deeper slump amid energy transition push. Retrieved from https://www.ft.com 
• Reuters. (2025, April 19). OPEC divisions threaten market stability as oil majors falter. Retrieved from https://www.reuters.com