Recent oil price tumbles force companies to shrink

The recent tumble in crude oil prices is forcing giant oil companies to rethink operations and downsize.

The Wall Street Journal reports that as the U.S. oil price benchmark started plummeting toward $80 a barrel, the three largest Western oil companies were hit by a drop in profits.

{mosads}ExxonMobil, Royal Dutch Shell and Chevron have decided to bury expansion plans and cut operations that have tight profit margin, according to WSJ.

The reasons is the increasing cost of extracting oil and gas.

All three oil companies are making less money extracting the fuels than they did a decade ago.

Shell recently reported that production is lower than 10 years ago and expects it to continue on its downward spiral over the next two years.

Similarly, Exxon’s production is at a five-year low and Chevron’s output has been flat this past year.