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How is the global oil sector responding to Covid-19?

In most countries, the oil industry is considered a core sector, and is not subject to imposed shutdowns. However, the global lockdown and consequent fall in economic activity has drastically reduced demand.

There has also been a dramatic fall in the oil price, both as a consequence of falling demand, and unrelated geopolitical tension. However, oil prices fluctuate and it will take several months before the effect on employment is known.

IndustriALL wrote to all companies that it has global framework agreements with, calling on them to work with unions to protect the health, safety, jobs and income of workers. ENI and Equinor replied, outlining their response to the crisis and committing to working with their unions.

There are significant differences from region to region and between companies, but overall, there are two distinct trends from oil companies:

  1. Oil companies have maintained production and protected core staff, sometimes with generous allowances for working in difficult situations. However, they have terminated relationships with contractors. Given that 82 per cent of work in the sector is carried out by a contracted workforce, this is having a devastating effect, as many have lost their income.
  2. Generally, decisions have been taken without consulting unions.

One exception is Norway, where a national agreement was reached between unions and employer organizations through the existing KonKraft framework to prevent permanent layoffs by maintaining activity. Strategies to solve temporary layoffs include enhanced research and development.

In Russia, most Lukoil white collar workers are working remotely, but although the company plans to reduce production, work continues, with additional personal protective equipment (PPE) and measures to combat the spread of the virus.

The Australian Workers’ Union has requested that operators provide ongoing financial support to contract workers, and that all workers are paid during quarantines. This has been largely successful, with the notable exception of Woodside, which stood down 1,000 workers without pay.

In Nigeria, NUPENG represents workers in the distribution network, including tanker drivers and petrol station workers. Union members are delivering hand sanitizer, masks and gloves to depots. Some companies have stood down contractors, and NUPENG expects many job losses over the coming year.

In the US, the effect on workers has so far been minimal, and the United Steelworkers (USW) has negotiated schedule changes to reduce exposure. The USW is also pushing for health screening and temperature checks at plants.

In Morocco, unions united to push for a pandemic management fund, made up of employer and worker contributions to social security, to pay affected workers. The unions are also calling for a moratorium on debt repayments.

Oil companies changed shift patterns in Iraqi oil fields to minimize contact after union demands. The union produced educational videos for members, and reached an agreement that the salaries of contract workers will not be affected.

In Brazil, the Covid-19 crisis comes shortly after the huge Petrobras strike. The company and its 63,000 workers are seriously affected. Unions are deeply concerned that President Bolsonaro is downplaying the crisis.

Energy director Diana Junquera Curiel said:

“We face an unprecedented situation. In the short term, we have to protect the lives and livelihoods of workers in the sector. In the longer term, we must prepare for the huge changes that this unfolding crisis will bring.

“At this difficult time, we must share information with each other, and act in solidarity. Together we can get through this.”

  • Image courtesy of the Australian Workers’ Union


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