Investors have suffered losses of at least $150bn in the value of oil and gas company bonds, as the slump in crude prices since mid-2014 has fuelled fears of a wave of defaults in the US and emerging markets.
The 300 largest global oil and gas companies have also seen $2.3tn sliced from their stock market value over the same period, a 39 per cent slide since oil began its decline, a Financial Times analysis has found.
The losses show how the financial strain on oil producers remains intense, in spite of the partial recovery in crude prices since January. Oil is still down 65 per cent from its June 2014 peak.
Banks have also been increasing their provisions for energy-related losses on their lending. They have tightened loan agreements with oil producers, and capital markets remain closed to the lowest rated groups.
More than $150bn has been shaved off the value of 1,278 actively traded bonds since Brent crude hit almost $116 a barrel in June 2014. Total debt among oil and gas companies, including loans, almost tripled from $1.1tn in 2006 to $3tn in 2014, according to the Bank for International Settlements.
Twenty of Europe’s biggest banks have energy loans totalling almost $200bn between them, enough to wipe out a quarter of their common equity. Twenty of the leading US banks have loans totalling $115bn, or 11 per cent of their equity. French banks have some of the highest exposures relative to their equity.