The collapse in oil prices is starting to make itself felt in the accounts of big oil as British oil and gas company BP posted its biggest ever annual loss last year.

In response, the company said it would cut 7,000 jobs by the end of 2017, as it grapples with the worst oil downturn in over a decade.

BP said it lost $US6.5 billion ($9.2 billion) in 2015, and reported a 91 per cent decline in fourth quarter earnings.

• Why the stock market chaos will end with a bump
• BHP to take $10.3bn write-down
• Motorists could see petrol prices fall below $1 a litre

Profit adjusted for one-time items and inventory changes was $US196 million, which missed analyst expectations of $US815 million according to a survey of ten analysts by Bloomberg.

“The recent sharp fall in oil prices has had a big impact on our results as it has for the whole industry, the key in time is to adapt and compete in the new environment,” chief executive Bob Dudley told investors in a teleconference.

“This time last year we predicted that the deteriorating environment would bring about an intense change for our industry.

“We talked about a reset phase of 2 years or so with outcomes defined by the level of oil and gas prices and we are seeing all of that playing out across the sector.”

The price of oil has slumped more than 70 per cent since June 2014. West Texas crude fell around 6 per cent last night to $US29.85.

BP is one of the biggest suppliers of fuel to Australia’s industrial sector and has a network of 1,400 retail service stations across the country.

The company is also grappling with the Gulf of Mexico spill in 2010, when it started cutting costs and selling assets.

A charge of $US443 million was taken in the quarter in relation to the spill, taking the cumulative pre-tax charge for the incident to $US55.5 billion.

Capital expenditure came in at $US18.7 billion for 2015, and BP said it expects to spend between $US17 and $US19 billion in 2016 and 2017.

Rival Exxon Mobil reported its smallest quarterly profit in more than a decade, and said it will cut spending by one-quarter and suspend share repurchases in 2016.