Decreasing Gas Prices and the Oil Industry
With so many countries on lockdown, people aren't driving as much, and as a result, there is a surplus of oil. Global oil companies have started decreasing their production of oil; on April 12, the two main countries involved in the oil war, Russia and Saudi Arabia, reached an agreement that stated they would cut oil output by about ten million barrels a day. However, this has had and will have devastating effects on the industry. Decreasing oil production, especially in Russia, means risking damaging wells and losing fields. The price of oil in the US decreased to $20 per barrel, which is not nearly enough to cover production costs. Furthermore, in the US, about 240,000 oil-related jobs (1/3 of the onshore and offshore workforce) will be lost this year. Many service workers have already lost their jobs, including rig operators, water haulers, chemical providers, and others.
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This is an interesting article about the ramifications of decreasing demand for gasoline. As with all industries facing reduced consumption, the oil industry is no exception. Lower production leads to lost jobs. On a brighter note, fewer cars on the road means less pollution.
ReplyDeleteThis is really interesting. All my friends talk about how nice it is that gas prices have dropped significantly, but its important to be wary about the ramifications the decreased demand has on the industry, the economy, and people's personal lives. However, I agree with Lily that this is definitely helping to decrease CO2 emissions.
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