Oil major BP has lost nearly £20bn of its value today as investors ditch energy stock following the oil price rout.
Rival Royal Dutch Shell has seen its market capitalisation shrink £18.1bn since the close of trading in London on Friday.
Both oil majors have dragged the FTSE 100 to one-day losses not seen since the 2008 global financial crisis.
A short time ago BP shares were trading 19 per cent lower at 320p, while Royal Dutch Shell shares were down 16 per cent to 1,339p.
On Wall Street, Exxon Mobil shares fell off a cliff at the opening bell and were still 8.2 per cent lower this evening.
Brent Crude oil was selling for just under $37 per barrel, down more than 18 per cent.
The crude oil price rout was sparked over the weekend after Saudi Arabia stunned markets with plans to hike oil production sharply following the collapse of Opec supply-cut agreement with Russia, unnerved investors.
Global markets, already hampered by coronavirus-induced fears, opened deep in the red across Asia, Europe and the US.
However this afternoon the Nigerian oil minister said Opec and non-Opec states might need to meet again to reconsider production cuts, given the shockwaves the supply increase had caused.
Russ Mould, investment director at AJ Bell said:
“The oil price’s collapse has understandably taken its toll on the oil and gas producers sector, which has been hit terribly hard, although one sector has done even worse and that is oil equipment and services.
“That select band of companies relies on oil firms’ spending plans and if oil stays low for a long time then budgets will be cut and those firms in charge of building and maintaining rigs, pipelines and refineries will be on thin pickings indeed”.
There is also doubt as to whether the dividend growth of previous years can continue.
The oil majors were entering “survival mode” in these market conditions and will have to assess where they can cut spending, Jefferies analyst Jason Gammel said.
“Buybacks and dividend growth are now almost certainly off the table, and questions on who will need to cut the dividend first will be topical,” Gammel added.