The Struggling Oil and Gas Industry Faces More Turbulence Ahead

July 24, 2020

With the oil industries second-quarter earnings to be released in just a few days, experts are preparing for the worst. Many industries have been hit hard during the COVID-19 pandemic and the oil industry is no exception.

Recently, Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), told CNBC, “The earnings for the second quarter are going to be horrendous.”  Hipple also noted that the “international benchmark Brent crude futures averaged just $29 a barrel in the three months through to June, down from an average of $51 a barrel in the first quarter.”

It is also important to remember that not only is the industry in trouble but the people who keep the industry running are going to suffer as well. Ramanan Krishnamoorti, a professor at the University of Houston Department of Chemical and Biomolecular Engineering, discusses the potential layoffs.

“The industry is in big trouble,” Krishnamoorti said. “You’re going to see a lot of bankruptcies, a lot of furloughs, more than furloughs. You’re going to see layoffs. You’re going to see people leave this entire industry because there aren’t going to be jobs.”

But at the same time, Krishanamoorti is optimistic about the future: “Looking three years down the road, I think this industry is going to rebound like never before,” he said. “But we’re going to go through a lot of pain before we get to that.”

This is a good reminder of the American workers’ resilience and that the oil industry while taking a hit now will come back stronger than ever. This valuable industry is essential to our country and while hard times are upon us now, they will not last forever. We need to do everything we can to help assist the industry that supports nearly 10 million American jobs and provides reliable and cheap energy to households across the country.