A Brief Analysis About The Future Of Oil Companies

Remember the rule on supply and demand? This very essential aspect of consumption

and production has fuelled the world economies for more than a century. People require something and producers provide the sources. As of now, the sources are dwindling, but is it the issue at hand?

Crude oil, a resource that is found at the depths of the earth's crust, is an essential resource that fuels global economies. From its discovery, it has changed forever the ways in which human being lived and it definitely has a very powerful effect on the demands of people right now. The population of the world is multiplying at an exponential rate right now and there is so much to serve with oil. Crude oil is processed into various fuels and oils, and these components are used for big industries, for automobiles and indirectly, it is part of the basic necessities of human beings. Major industrial markets require vast amounts of oil but the world is rapidly advancing and many countries like China and India, need these for the manufacturing industry and the massive automobile industries they have. Not only those, but also these two countries have the biggest populations. However, it is not only the industrialized countries that require this resource.

Oil companies especially those participating in the OPEC are not much help for the fuel demands of the world. The high prices and of course very difficult negotiations make it very difficult. Non-OPEC companies are slowly peaking already and their resources are dwindling every second. Most of the fuel companies only have until a few decades before they scrape the barrel. It is essentially the OPEC players that will be the primary source of fuel for the world. However, sooner or later, there will be a shift.

What is the problem now? The issue is that the demand is exceeding the supply. So many manufacturers, new cars made and tons of other things in the world are manufactured each year and the demand never ceases even for a bit. The projected increase in oil demands is slowly reaching critical mass and so it is essential for oil companies to find new sources of crude oil or the future of oil companies will be in jeopardy. However, that is a very unlikely scenario. Most of the oil reserves around the world have been dried up and most of the remaining ones are found in the Middle Eastern and African countries, most are from the OPEC members.

There is a scary apocalyptic appeal with the idea of oil companies losing oil reserves. Fuel alternatives are very hard to find right now and it won't be in existence for another three decades. The current options like nuclear and coal energy are very unfavourable for the environment but oil of course has catapulted most of the climate change issues because of CO2 emissions. The true problem that arises here is the exceedingly high demand for oil. Oil companies can only pump out too much oil and once they hit the bottom of the barrel, what are the people of the world supposed to do? There is a big question right now about what is the best solution, but with the current conditions of economies, it will still be another Thirty years or so of battle about the dwindling resources and high demand for oil.

by: Sunil Punjabi

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