Royal Dutch Shell Plc cut its dividend for the first time since the Second World War as the oil slump triggered by the coronavirus pandemic slashed profit.

The two-thirds reduction in the payout will shock investors who have depended on Shell’s generous returns for decades. The company’s surprise decision underscores the gloomy outlook for the energy industry this year. Weak earnings in the first three months of the year are expected to be followed by an even tougher second quarter as lockdowns all over the world cause a historic slump in demand.

“Shareholder returns are a fundamental part of Shell’s financial framework,” Chairman Chad Holliday said in a statement on Thursday. “However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the board believes that maintaining the current level of shareholder distributions is not prudent.”

Shell’s board decided to reset the level of the the first quarter 2020 dividend to 16 cents a share, from 47 cents previously, Holliday said. The company will continue to evaluate its “capital allocation priorities,” while increasing shareholder returns “remains our ambition.”

BP Plc and Eni SpA already reported big drops in profit and growing financial stress. The European oil majors are curbing spending and bolstering their financial reserves to weather the downturn. Exxon Mobil Corp. has frozen its dividend for the first time in 13 years, but so far only Norway’s Equinor ASA had gone as far as cutting its payout.

Shell’s adjusted net income was US$2.86 billion in the first quarter, down 46 per cent from a year earlier but exceeding the average analyst estimate of US$2.29 billion. Estimates have been revised significantly down since March, when the pandemic began to accelerate.

The Anglo-Dutch company’s shareholder returns were already looking unaffordable before the virus hit. The company said in January that it had slowed the pace of its share buyback program and was unlikely to hit its $25 billion target this year. In March, it announced the cancellation of the next tranche of purchases as the severity of the pandemic became clear.