The coronavirus pandemic has dramatically affected every industry. For example, analysts suppose that the virus outbreak has changed the global oil market forever. Earlier, the oil market situation was shaped by sanctions and price war. However, the pandemic has made the largest impact. In any case, the oil industry may fundamentally alter and its participants will have to adapt to the new conditions.
“This is not a cycle. There will be no return to normal,” Clareo’s managing partner at business consultancy Peter Bryant wrote. “This is a defining moment of ‘restructure’ that will completely reorder the supply chain and create new opportunities,” he also added.
The opportunities will be for those with the cash, namely large oil companies and private equity firms. The rest will consolidate or go under, especially small companies that will be unable to cope with the worst crisis in the segment. Those firms that will stay afloat may have to forget about their extra revenue and cut their dividends.
“Even though the oil industry theoretically has a diversified product portfolio, the current situation shows that its ability to switch between markets is extremely limited. The industry failed the stress test,” director of research Arij van Berkel at Lux Research said.
