In its final quarter of the 2020 Fiscal year, the Exxon Mobile company, formerly known as “Esso” had suffered a $20 billion loss to close out what the oil company considers to be the “most challenging year ever”. According to a report by the EIA, the coronavirus pandemic had raised energy prices well over 20% in 2020. As a result, it was Exxon’s first ever true loss as delivering oil and gas to local gas stations will be exponentially more difficult.
According to Exxon CEO Darren Woods, “The pandemic has presented the most challenging market conditions our company have ever experienced. We had to cut 15% of our workforce and delay our gas projects due to these struggles”. 22 billion dollars were added to the company’s debt last year to cover its dividend and project spending. The net annual loss of the company is $8 billion dollars more than 2019 ($14 billion)
This is a bigger problem when accentuated by the fact that many of America’s gas stations such as Mobil and Sunoco are reliant on Exxon for gas and oil. Stocks in both companies show that their overall net worth is above $17 billion, so the inability for Exxon to serve Mobil and Sunoco’s needs will leave a major mark on the companies and their reputation. If this trend continues, by 2023, structural changes and cost savings will accrue to almost $6 billion!
Many Americans, however, see positivity in the raised energy prices. According to pedestrian and reporter Jennifer Hiller, “perhaps this will inspire a push for fossil fuel-friendly alternative ways of travelling”. Motor oil and gasoline is rather harmful to the environment, so activist investors are pushing for broad changes and clean strategies in the transition to electric powered vehicles. Discussions with Exxon Board of Directors are in progress regarding the future of this issue and the company.