BP chief Bob Dudley says current oil crisis is as bad as 1986

In 1986, the oil price crashed from a peak of $35 a barrel to below $10

Bob Dudley, CEO of BP (Reuters)

BP boss Bob Dudley has told journalists at the World Economic Forum meeting in Davos that the current oil crisis is as bad as the situation in 1986.

“The first and second quarter will be very difficult... It is a big shock for producing countries. It reminds me of (the oil crisis in) 1986,” Dudley said.

In 1986, the oil price crashed from a peak of $35 a barrel to below $10 as industrial countries slowed down and high fuel prices lowered consumption.

In an earlier meeting with the BBC, Dudley said it was "not impossible" that the oil price could once again hit $10, but that prices that low would not last long.

Dudley predicted that prices would hit bottom towards the summer before rebounding with demand from China and North America in the second half of the year.

“We could see a price $30 to $40 by the middle of the year and I think towards the end of the year it could be into the $50s," he said.

BP announced 4,000 job cuts in January, including 600 in its North Sea operations, in light of "toughening conditions" as the oil price continued to fall from over $100 a barrel in the summer of 2014 to near $27 a barrel today.

Iran is expected to contribute to the oil price glut as it resumes pumping oil following the lifting of nuclear sanctions with the West.

The BBC asked Dudley if he had an interest in Iran, given that BP was known as the Anglo-Persian oil company until the 1950s. He said that BP was watching Iran carefully, but that it still had a degree of caution because US sanctions were still in place.