"We lowered our ratings on Royal Dutch Shell PLC to 'A+/A-1' from 'AA-/A-1+' and placed the long-term rating on CreditWatch with negative implications," S&P said in a statement today.
The credit rating agency also put the ratings of BP, Eni, Repsol, Statoil and Total on negative watch, meaning they're also in line for a potential downgrade.
S&P recently slashed its oil price forecasts to $40 per barrel for the rest of this year, $45 per barrel for 2017 and $50 per barrel thereafter. It added that the 70 per cent fall in oil prices would only be partially offset by oil firms' cost-cutting measures.
Analysts have warned investors to brace themselves for a "messy" set of fourth quarter results when BP kicks off European oil firms' earning season tomorrow. BP shares tumbled to the bottom of the FTSE 100 today following cuts by brokers BNP Paribas and Deutsche Bank.