Delicate. Volatile. Revolutionary. Unpredictable. These are just a fraction of the portrayals used to paint the current state of oil and gas.
This industry is both plagued and blessed with a vast array of variables affecting the ecosystem. From fiscal predictions, political uncertainty, the speed of consumer consumption, and digital disruptions, the landscape has become saturated in all directions.
So, as we jump into the summer season of 2018—Where gasoline prices are hitting a four-year high and we near the 1 year after-math of Hurricane Harvey—what are the largest forces shaping this indescribable industry?
1.) HIGHER PRICES – With crude oil prices reaching a 4 year high, gasoline prices inevitably have climbed too. The basic economic principal of supply and demand has forced American families to pay over $3 per gallon and refineries to run at full throttle. Expected seasonal patterns also affect this price, as nicer weather peaks and summer vacations soar.
“Crude oil is selling at high prices compared to previous years, and domestic gasoline demand has been high most of the winter, among the factors all driving gas prices up and draining consumers’ wallets.” AAA spokesperson Jeanette Casselano.
2.) TECHNOLOGY BREAKTHROUGHS – It’s no secret that digital is transforming centuries of communications. But specifically for the oil and gas industry, these breakthroughs are determining the success of businesses entirely. In most cases, this means one extreme or the other: you’re either flourishing or failing. Coasting is no longer an option.
Top Technological Trends Driving Business Performance:
- Artificial intelligence and machine learning
- Augmented reality
3.) LIFESTYLE SHIFTS – Big data, IoT, and AI have allowed consumer consumption and communication to drastically transform from centuries of traditional socialization. Our demand and expectations (and ability to have them fulfilled), have sped up faster than we can wrap our heads around. This always-on, endless-options type of experience has infiltrated everything from how we interact, how we eat, how we talk, and even how we define our individuality or values. So it’s no surprise that as consumer expectations shift, business experience must keep up. Speed, efficiency, and connectivity are no longer advantageous to an organization, but a necessity.
4.) UNPREDICTABLE CLIMATE – Although more notably in reference to uncontrollable weather devastation, this topic of interest has recently been focused on political unrest as well. From hurricane season to blizzard season, international agreements and trade supply, many challenges develop too rapidly to prepare in matched scale. And with changes often piled too closely together, the damage can become irreversible to communities and businesses alike.
“Despite a burst of environmental deregulation and climate change skepticism from President Donald Trump, most large oil and gas companies today acknowledge climate change and try to push for policy solutions that will still leave them a significant role in the energy future.” TIME, US – Energy
Looking for more insight into these issues and more? Register for this year’s Best Practices for Oil & Gas conference, held September 18-19, in San Antonio.