04.

IMPACTS OF
THE OIL CRISIS
2020
 NEGATIVE IMPACTS

Economy Labor Market Oil-storage facilities

Negative impacts on economy

Shale industry: rig owners, well services providers,

drilling tool manufacturers, and oil country tubular
goods manufacturers

Multinational groups to local operators:

• More than 28 North American O&G

producers announced capital spending cuts of
30%, or US$12 billion, for 2020.

• Hundreds of small firms could go bankrupt

even with prices at $20 per barrel
Labor Market

Before oil crisis (in 2019)

The oil and gas industry employed nearly
470,000 people across extraction, drilling
and support activities
In March, 2020
The oil and gas industry lost 51,000 drilling
and refining jobs
After oil crisis
The pandemic made 107,000 oil and gas
jobs disappear. Most aren't coming back
anytime soon
 OIL-STORAGE FACILITIES

Oil-storage facilities in the US

have filled-up quickly

 In April ,the total oil storage

capacity is 80 million barrels

 After one month, Cushing has

only 20 million barrels of free
storage left, which is fully booked
and likely to be completely utilized
in the end of May.
Cushing (Oklahoma)
POSITIVE IMPACT

— Lower oil prices is lower inflation

—

A lower inflation rate is good for the consumers.

 05. SOLUTIONS
Cut production by a record amount Buy oil for the country's national reserve
A deal with OPEC to prop up prices,
OPEC members and its allies
committed to buying oil for the Strategic
finally agreed with a record deal to
Petroleum Reserve.
slash global output by about 10%
=>>Storage facilities in the US will run
=>> the OPEC deal will not be
out of capacity, on land and at sea.
enough to balance oil markets

Make funds available for important companies.

A plan which will make funds available for important big shale oil and gas
companies
=>>U.S. oil futures prices turned negative on April 20 for the first time ever,
many big shale oil and gas producers are protected from low prices by
hedges in 2020 and many refinanced debt in recent years to put off debt
 06. PREDICTIONS
Oil Prices Won't Be Negative Forever. But the Oil Industry Will Never
Be the Same
1
Vaccination is not a panacea, social distancing,
testing and isolating cases will remain for some time

2 The Great Depression

The International Monetary Fund expects the world’s economy to
contract by 3%this year, due to what it calls the “Great Lockdown”

3
Some pandemic-era lifestyle changes might stick

4
The longer the COVID-19 pandemic lasts, the greater the damage oil producers will
endure.
 100 million barrels a day.
The “golden era” in 2019 when the US became the Number 1 oil producer in the
world.
 07. Lessons after the oil crisis

2020 may well be remembered as the worst year in the history of global oil markets
when it broke. =>> Black April

Oil market stability is essential to the economic growth of the world

in the future

But it requires cooperation for supply and demand

balance, rather than price wars, tensions or the politics
of finger-pointing and blaming each other
Thanks for listening!