Imperial Oil, an Exxon oil sands subsidiary, is planning to reduce its workforce by 20% in anticipation of lower oil prices brought on by an expected supply overhang next year.
According to a company statement, Imperial Oil will “consolidate activities to its operating sites” over the next two years, enhance “collaboration, operational focus and execution excellence. As a result of these changes, the company expects to record a one-time restructuring charge of approximately $330 million before-tax in the third quarter of 2025.”
Imperial Oil expects to generate annual savings of $150 million following its restructuring, it said in the statement. In other cost-cutting efforts, Imperial Oil last year cut upstream expenses by $3 per barrel, Bloomberg noted in a report on the news, and plans to cut them further this year.
The Imperial Oil news follows another report about cost-cutting in the oil industry, this time from TotalEnergies. The French supermajor is planning cost cuts of a total $7.5 billion by 2030, the Financial Times reported this week, in response to lower international oil prices.
Capital spending would be reduced by $1 billion, TotalEnergies said on Monday, expecting to spend an average $15-17 billion annually between 2027 and 2030. The company would also curb share buybacks in a context of heightened economic uncertainty, it said.
Forecasters, including investment banks and the International Energy Agency, are predicting oversupply of crude oil for 2026 as a result of lukewarm demand growth and OPEC+ unwinding its production cuts, which would hypothetically add over 5 million barrels daily to global supply. However, the group has been undershooting its own production unwinding targets, providing some support to prices. Geopolitics is the other factor propping up prices amid bearish forecasts, and the effect of geopolitical events on prices might be worth keeping in mind when assuming there will be a glut of crude next year.
By Irina Slav for Oilprice.com
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