Royal Dutch Shell (LON:RDSB) have announced a cost-cutting program in reaction to the oil price collapse and ongoing uncertainty around coronavirus.

The Shell share price has declined more than 66% from the 2018 highs to recent intraday lows of 890p.

Today’s measures are aimed at improving Shell’s financial situation and includes $3-4 billion of cuts to operating costs.

The oil giant also said it would be ceasing its share buyback programme, but made no mention of changing their dividend.

Ben van Beurden, Chief Executive Officer of Royal Dutch Shell, commented:

“As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business.”

“The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past.”

“In these very tough conditions, I am very proud of our staff and contractors across the world for maintaining their focus on safe and reliable operations while also ensuring their own health and welfare and that of their families, communities and our customers.”

Despite today’s announcement raising questions about Shell’s short term profitability, equity analysts are still confident about the long term prospects of Royal Dutch Shell.

John Woolfitt, Director of Trading at Atlantic Capital Markets said “clearly since we first highlighted it as a tip of the year the global backdrop has considerably changed, Oil prises collapsing and Cornavirus. Todays announcement has also highlighted the steps they are making in the current environment.”

“Nobody could possibly have seen this coming at the start of the year but lets not get caught up in the near term moves. They are still fundamentally sound and still offer investors an opportunity to pick them up at considerably lower levels.”

“Sharebuy backs have been reduced for the time being but no mention of a dividend cut.”