More than 120,000 UK jobs relating to the oil industry will be wiped out thanks to the oil price crash, according to a report by industry lobby Oil & Gas UK.
The report says that an estimated 84,000 jobs went in 2015, with a further 40,000 more losses expected in the industry this year.
At its 2014 peak, the UK offshore oil industry supported 453,000 workers — directly and indirectly. Apart from suppliers, jobs ranging from drivers, hotel staff and caterers all rely on robust oil prices.
Brent oil currently sits around the $51.4o a barrel — less than half the $115 price it was roughly two years ago, and well below the roughly $55-60 per barrel price that British oil producers need to break even.
The gloomy jobs numbers come as Oil & Gas UK gears up for its annual conference in Aberdeen next week to discuss combating the downturn. It will also talk about potential implications of a Brexit on the industry.
Oil & Gas UK CEO Deirdre Michie said the slump means the industry has spent more than it earned in the last year-and-a-half: “This is not sustainable and companies have been faced with some very difficult decisions,” she said. “To survive, the industry has had no choice but to improve its performance.”
Michie added that increased efficiency was the key in order to “restore competitiveness, to attract investment and stimulate activity in the North Sea. With up to 20 billion barrels of oil and gas still to recover, this region is still very much open for business.”
“Everyone in the sector can play a part,” she concluded. “Effective workforce engagement is vital onshore and offshore, as is greater cooperation — within teams, within companies, across the industry and with the Regulators and Governments.”
Despite the job-loss projection, oil has shown signs of a recovery in the past six months. On Wednesday, both Brent and WTI oil closed above $50 a barrel for the first time in 11 months. Goldman Sachs also turned bullish on oil in mid-May, suggesting the supply chain would balance out over the rest of the year and prices would improve accordingly.
Here’s a look at Brent oil’s rise over the last month: