Press "Enter" to skip to content

Oil May Recover the Demand not the Oil Investments

The demand for oil is escalating, and is expected to further grow exponentially potentially reaching pre-pandemic levels of 100 million barrels per day. However, the major concern right now is whether the upstream Investments will influence the rebound in oil prices.

The international oil companies in the United States are refraining from stretching their spending as the activity across the nation has not stepped up completely. United States continues to see slowed growth in the oil production.The cautious approach not hasting into large spending while sticking to the budgets set last year amidst historical lows is expected to encourage upstream Investments. such cautions will allow the exploration, and production companies to scale down debt rapidly.

IOCs stood to incur massive losses owing to the drastic fluctuation in the oil prices. This situation was further complicated by the repercussions of incessant lockdowns imposed amidst COVID-19. The reported losses combining the oil majors such as Chevron, Shell, BP, and ExxonMobil were $77 billion for the destructive year 2020. Considering these factors, IOCs are currently under immense pressure particularly when making crucial decisions. These include drastic decisions like reducing company costs through mass layoffs or massive cuts in the upstream Investments.

After the rollercoaster of fluctuating oil prices last year, oil prices are final regaining a sustainable track with $70 per barrel mark. With regaining momentum in oil prices, the oil industry now awaits return of upstream Investments from the IOCs or through market domination by national players.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *