Impact of COVID-19 Outbreak on the Global Drill Bits Market
The COVID-19 outbreak has had detrimental effects on the global economy as many industries have been affected by the current circumstances, and operations of various sectors have come to a standstill. In the oil & gas industry, companies are dealing with several challenges due to a decline in oil prices post the COVID-19 outbreak. In the US, the consumption of petroleum products has fallen to its lowest level in decades because of measures that limit traveling and the general economic slowdown induced by mitigation efforts for the COVID-19. The US EIA estimates the decline in petroleum product demand by examining the changes in the total products supplied. In the week ending April 3rd, 2020, the total US product supplied of petroleum products fell by 3.4 million barrels per day, the largest weekly decline in EIA’s data series. This would affect the operations of drilling equipment as this equipment are useful for oil and gas extraction processes and further transform crude oil into useful petroleum products.
FIGURE: PETROLEUM CONSUMPTION STATUS (1990 TO 2020)
However, the European oilfield service market, which was expected to stay flat this year from the 2019 level of USD 47 billion in pre-coronavirus estimates, is now facing several hurdles because of the outbreak. The outbreak has played a significant role in the recent oil price crash, which, combined with the volatile markets, has pushed many field developments projects out in time. In China, oil price wars began with a decrease in supply and demand within the country. China is hoping to restore production as the demand for oil decreases in Europe and the US, which will create a need for drilling equipment such as drill bits and other equipment.
Source: Primary Experts, Secondary Sources, and MRFR Analysis
Source: U.S. Energy Information Administration