The leading representative body for the UK’s offshore oil and gas sector has warned that the latest oil price developments “could fundamentally undermine the ability of the industry to recover and serve the energy transition.”
The warning from trade group Oil & Gas UK (OGUK) came as US crude oil prices fell below zero overnight — while the international benchmark Brent fell to $22.61 per barrel.
U.S. West Texas Intermediate (WTI) crude for May delivery traded at minus $2.58 a barrel by early Tuesday. The June contract slipped 1.1% to $20.20 a barrel.
While WTI is a localised trading market in the US, OGUK warned it remains concerned about the continued low prices of Brent crude.
OGUK chief executive Deirdre Michie said: “While we have anticipated continued pressures on oil markets, there’s no getting away from the fact that this situation is a body blow for an industry already creaking under the strains of the impact of COVID-19 and sustained low commodity prices.
“The dynamics of this US market are different from those directly driving UK produced Brent, but we will not escape the impact.
“Ours is not just a trading market; every penny lost spells more uncertainty over jobs, our contribution to public services and to the just transition we all want to see.
“OGUK will be pressing the case for a COVID-19 resilience package to governments in the coming days which will focus on protecting the supply chain, jobs and our ability to continue to reposition ourselves for the future.”