America’s biggest energy company Exxon Mobil Corp. loses its position to India’s Reliance Industries to become world’s largest energy company after Saudi Aramco.
On Friday, market value of Reliance went on to set a record high of over $189 billion while Exxon lost around $1 billion. Amidst the slump in oil demand and prices due to coronavirus crisis, Reliance’s shares soared 46% this year, and Exxon Mobil’s fell 39%.
Notably, the energy business of Reliance accounts for about 80% of the company’s revenue while the non-energy businesses like digital and telecom services and retail have made a net profit of $5.3 billion, making it India’s top-most company so far. Reliance is also the first Indian company to cross a market capital of $150 billion.
The pandemic-led collapse of oil-demand continues to echo in the second-quarter after plunging by 30 million barrels a day. With OPEC production cuts and stringent lockdown measures, there has been a sharp decline in supply, contributing to a tighter market hitting oil companies like Exxon.
With a dozen moving parts of the oil market, it is too soon to forecast anything concrete as Covid-19 has made the calculation more cumbersome. Meanwhile, Reliance basks in the glory of making it to become the 2nd largest energy company.