There is no two way to it: the global pandemic has dealt a huge blow on the oil and gas sector says the experts of Kelcas Oil. Although the industry is no stranger to ups and downs having scaled through different bumps in the past few decades. However, the recent COVID-19 crisis shows the industry is headed to another market disruptions. Global travel bans, countries on lockdown, airplanes grounded. Not to forget almost all forms of public transport suspended. It’s no surprise the global oil demand have to shrink drastically. Add to this, falling prices have also created distress among the investors and the increased tension among suppliers has all contributed to the problems.
However, this is not the time for oil suppliers to be in a panic. The future of the oil and gas industry lies in the strategic steps that are is being taken now. Forward-thinking oil companies need to plan to raise the industry back up. Hence, kelcas oil, a renowned oil and gas company assess where the industry stands in the future and what can be done.
What is the Current State of the World Energy?
According to the experts of Kelcas Oil Corporation, the current state is all a combination of supply shock with a sharp decline in demand as humanity battles with life across the world. Several countries are suffering from life-threatening coronavirus making them go on partial or total lockdown. This means there is no car movement, railways are suspended, and ship operation has been halted. Global travels become impossible with countries imposing travel bans to curb the spread of the virus. Ultimately, the airplanes are still on hold.
Moreover, there have been excess supply and oil storage are filling up amid the collapse in demand. There have been predictions that the pandemic is expected to wipe out 9.6 million barrels per day (bpd) of oil demand in 2020. This means COVID-19 is not only threatening lives but also the state of the oil and gas industry and the health of the global economy. The depth and duration that the crisis will affect the industry is unknown. However, without drastic steps taken, it will be difficult for the industry to get back up within a short period of time.
What can be Done?
An industry that relies heavily on the in-house team, could be the time for the remote economy to take over. With movement restrictions put in place, operations still need to be carried on, thanks to digitalization that has make this possible. Some oil and gas companies such as Kelcas Oil has already embraced digital platforms and work remotely. This has led to cost reduction and profitable operations as organizations seek to run leaner and meaner operations during this period. It is expected that more companies will follow this lead to ensure business continuity. At a time when the industry is at its worst, the winners are those that tap into the technological world and restructure their operating models to adapt to the tough conditions.
What does the future hold for Oil and Gas?
To be real, the oil and gas industry is one sector that will always be in demand. When life returns to normal, aviation companies will kick back up as people who have been in compulsive lockdown begin to travel. And according to the experts of Kelcas Oil Corporation, this is one industry that is too important to be ignored and it will remain a multi-trillion dollar market even for decades.
Moreover, oil and gas are one of the few markets that always enjoyed the luxury of not being affected by the elasticity of oil demand. This means demand for oil is not responsive to changes in price. Hence, if there are any changes in price when life picks up after COVID-19, the industry is expected to rise.
Not to forget that the oil industry has survived many periods of hardship including the 2014 crash. It is safe to say there is still hope and confidence that the industry will weather the storm.
