Covid-19: Impact on the US Oil Industry

The US oil industry is facing steep downfall which is reflected by the declining commodity prices attributed to reduction in global demand of the different commodities as the novel coronavirus has impacted the economic growth of the countries. The US government has been issuing directives related to travel restrictions and is asking people to stay at home to avoid the mass gatherings. Furthermore, the government of the country has also issued temporary closure of schools, universities, production facilities and offices, which in turn is making adverse impact on the demand for crude oil. The coronavirus has infected more than 3,80,600 people out of which 16,303 have lost their lives yet. The US is the highly affected country with this COVID-19 outbreak with more than 33,000 cases in the country. 

Browse the full report description Impact on the US Oil Industry due to COVID-19 Pandemic, Deviation & Trends Analysis Report, by drilling method (Onshore and Offshore) and Forecast 2019-2025 at https://www.omrglobal.com/industry-reports/us-oil-industry-market

With the rising social awareness the country people are involving themselves in doing self-quarantining to restrict the spread of the virus but with it the halted transportation is lowering the global demand for oil. Further, in lieu of the outbreak of coronavirus in the US, the country also bans airplane operations in most of the affected countries. Apart from travelling, due to the halt of several manufacturing industries in the country which are the end-user of the oil industry is further making a significant impact on the oil industry of the country. Thus, with the rising pressure of the work from home schedule and restricted travelling pattern the oil industry is highly deteriorating in the US.

At this time of the crisis, Saudi Arabia, the major oil exporter across the globe has revealed its plans to increase the crude oil production to 12.3 million barrels per day in April, 2020 after the disagreement on the contract between the OPEC countries and Russia. Russia and Saudi Arabia’s combined decision to produce more volumes of the oil is further anticipated to lower the price of the crude oil from the current level of prices due to supply surplus of the crude oil. With this particularly the US shale-based oil and gas companies are finding it difficult to compete with the other oil producers for a prolonged period under this downfall market scenario.

Chevron Corp., EOG Resources, Inc., ConocoPhillips Corp., Pioneer Natural Resources Co., Marathon Oil Corp., and Anadarko Petroleum Corp. are the major oil producing companies operating in the US oil industry. To make stable demand and supply in the oil industry due to COVID-19, OPEC planned output cut to support oil prices by 1.5 million barrels per day until June. Also, the US government has mad promise to increase the oil prices by filling up of their strategic petroleum reserve. At the time of this crisis the Federal Reserve had also cut the interest rates to nearly zero, however, the oil industry of the US is still exhilarating for a long downturn as the coronavirus pandemic raises the risk of a coming recession. OMR global recently published a report titled ‘the impact of COVID-19 on ‘the US oil industry’. The report includes analyses of the country.