Impact of COVID-19 on the Global Oil Country Tubular Goods (OCTG) Market
The outbreak of COVID-19 has affected the global economy of various industries, including oil & gas, manufacturing, and chemicals. This pandemic has not only disrupted the supply chain of the oil & gas industry, but it also influenced the exploration and production activities in the industry. The oil & gas industry has been negatively affected by COVID-19 as most countries worldwide have imposed lockdown restrictions, which have impacted the import and export of goods and services, leading to a decline in the sales of oil and gas. Moreover, the COVID-19 pandemic led to a disruption in demand and supply of oil and gas, which is results in huge financial losses in the industry. In the oil & gas industry, most essential operations are carried out by human resources in on-site job locations. The COVID-19 crisis has resulted in a decline in the production activities of oil and gas due to lockdown restrictions and disruptions in the supply chain of the oil & gas industry. However, as per the BP Statistical Review of World Energy 2019, the global production of oil and natural gas increased from 92,502 thousands of barrels per day (TBPD) in 2017 to 94,718 TBPD in 2018, while natural gas production grew by 5.2% in 2018 with 3,677.7 billion cubic meters (bcm) in 2017 to 3,867.9 bcm in 2018. OCTGs are tubular goods used in production and exploration activities on oil and gas in the construction of the oil well, through which oil is transported from reservoirs oil rigs. However, COVID-19 has considerably disrupted this momentum.
FIGURE: World Liquid Fuels Production and Consumption (Million Barrels Per Day)
Furthermore, major oil-producing countries such as the US, Russia, and Saudi Arabia have witnessed a steep fall in the demand and supply of oil and gas, which has caused a significant impact on the global oil & gas market. The effect of the global oil price crash and uncertainty in the policies and measures taken by government authorities have caused a devastating blow to the global economy, disrupting supply chains and choking off the demand and supply of oil and gas.
Source: Primary Experts, Secondary Sources, and MRFR Analysis
Source: US Energy Information Administration and Short-Term Energy Outlook, May 2020