The drop in big oil companies’ profits in the past eight months isn’t just a function of lower crude prices – it also reflects strategic choices. A Reuters examination of corporate filings by some of the biggest players in the industry, including BP, Shell and France’s Total, shows the sensitivity of these companies’ earnings to changes in oil prices has risen in recent years. This means that for every dollar the oil price drops, their profits sink more than they might have done five years ago. Of course, that wasn’t the plan. Choices made by several oil majors that built more exposure to prices into their portfolio, mainly through the kinds of contracts they opted to sign, was aimed at enjoying prices that were historically high. “In simple terms it (oil price sensitivity) has increased and that’s been a deliberate choice,” Simon Henry, Chief Financial Officer […]