How Low Oil Price Affects Petroleum Companies and Petroleum Workers


searchBelieve me or not  some  people are happier with the recent low crude prices because they can fill their cars with cheaper gasoline, but  it hurt more oil companies and oil and gas workers.

Now let see how this it affect petroleum companies and i will finish by explain how it affects oil and gas workers.

Lets go


How it affect oil companies

The industry is composed of four segments

Upstream companies: they deal with exploration and production in other word they getting crude out of the ground. These  companies  experience bad time  during low crude prices as the cost of selling price it depend on market situation, while the cost of production is fixed. So if it costs more in production and exploration and costs at which  they sell price it gets low, they will incur losses .

Midstream Companies: They deals with moving crude oil and natural gas, example of midstream stuff  such as pipelines, tankers rail car etc. Since oil price is low these companies will move oil at the low prices.


Downstream companies they deal with refining manufacturing and selling of products from oil and natural gas like petrochemicals, lubricants and fertilizer. These companies are not affected much because they make profit by purchasing  crude or natural gas and selling their product so these companies still make profit even in downturn.

Service companies: they provide man power and help in service in oil and gas companies, example  Schlumberger,  and Halliburton, This companies during downturn experiencing serious trouble since because they depend on receiving tender from upstream  Companies,  So they must receive even less payment from operators as a result they incur loss.


How it affect Petroleum professionals

Petroleum companies are not only who feel the pain of this low prices but also it hurts  oil and gas workers. As the  crude price gets low petroleum companies try to find ways to run their operation with minimum cost and ensuring they are making profit, in order to do so they cut up jobs and laid off its workers. As the  oil and gas workers  lost their jobs in petroleum companies make them experiencing bad time.

Read :how-oil-gas-professionals-who-lost-jobs-can-survive-the-low-oil-price


Low oil price is not  a good news to every one because it has it hurts companies in petroleum business as well as oil and gas workers

Hussein Boffu runs a consultancy helping entrepreneurs achieve their goals through business planning and consultancy support. Would you like to reach out to him? Contact him via email at or by calling, texting, or WhatsApp at +255(0)655376543.

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