oil rig
Oil exporting countries have been put under intense pressure over the past 18 monthsReuters

Commodity giant BHP Billiton announced its biggest-ever write-down on 15 January, as it wrote down the value of its shale assets in the US by $7.2bn (£5bn, €6.6bn) on a pre-tax basis, on the back of the ongoing slump in global commodity prices.

Oil companies and oil exporting countries have been put under intense pressure over the past 18 months, as oil prices have plummeted 70% since June 2014, with West Texas Intermediate and Brent crude trading at just over $30 a barrel.

Earlier this week, RBS and Morgan Stanley warned crude prices could fall within the $10-$16 a barrel range, while other analysts expect the decline to continue, with prices driven lower by oversupply, weakening demand and geopolitical developments.

"Iranian sanctions due to be lifted imminently should put more pressure on Crude into the weekend, as if the Chinese slowdown and a stubborn Opec aren't enough," said Michael Van Dulken, head of research at Accendo Markets.

"At best we could see yesterday's breakouts above falling highs maintained but with down trending support. At worst, a break down into the $20s."

BHP's move means the FTSE 100 group, which was recently hit by a dam collapse at a mine operated by Samarco Mineracao SA, its 50-50 joint venture with Brazil's Vale SA, has now written down almost two-thirds of its investment in US shale.

"Oil and gas markets have been significantly weaker than the industry expected," said group chief executive Andrew Mackenzie.

"Although we expect prices to improve from their current lows, we have reduced our oil price assumptions for the short to medium term.

"Our long-term price assumptions continue to reflect the market's attractive supply and demand fundamentals."

Amid the ongoing decline in oil prices, the London-listed company has implemented a series of cost-cutting measures at its onshore operations in the US and has drastically reduced the number of oil rigs over the last 12 months, with only seven remaining compared with 26 a year ago.

BHP, which in August posted its worst annual profit since 2003, added it plans to close two further rigs by March this year, while investment and development plans for the remainder of the 2016 financial year are under review.

The write-down was not entirely unexpected, the scale of it surprised analysts, while a number of investors now expect similar moves in the foreseeable future.

"A $7.2-bn write-down is huge in anyone's book, even a company the size of BHP," said IG's market analyst Angus Nicholson.

Following the announcement, BHP shares were trading firmly lower and were down over 5% at 9.32am GMT.