Royal Dutch Shell Plc cut its dividend for the first time since at least the Second World War as the oil slump triggered by the coronavirus pandemic reshapes the energy industry. The surprise move is the latest illustration of how the global spread of the deadly disease is causing the biggest upheaval for generations. Energy consumption is undergoing a historic plunge, as is GDP growth in many countries. The global economy that emerges from the other side of the crisis may look very different.

This is a big moment in the history of Shell and the oil industry. The company was by far the biggest payer in the FTSE-100, providing a reliable income to millions of pension fund investors. The two-thirds reduction in its dividend to 16 cents a share — “much worse” than many investors wanted or expected according to Redburn analyst Stuart Joyner — underscores the gloomy outlook for the year. “It is of course a difficult day, but on the other hand it’s also an inevitable moment,” Shell Chief Executive Officer Ben van Beurden said in an interview with Bloomberg TV. “We have reset our dividend to a level we believe is affordable.”

The pandemic will result in lasting changes to the world’s energy consumption and it’s hard to say if oil demand will ever return to levels seen in 2019, van Beurden said. Slashing Shell’s once-sacrosanct payout is a significant U-turn for van Beurden. Only three months ago, he touted the high dividend as a key attraction for shareholders and said he wouldn’t cut it. “I think lowering the dividend is not a good lever to pull if you want to be a world-class investment case, so we’re not going to do that,” the Shell CEO said on Jan. 30.