When thinking about this past year the COVID-19 pandemic and the impact that it has had on the economy, workplace, schools, and social gatherings may come to your mind. What about the impact it has had on the petroleum industry? Did you know that in 2020 the oil demand was the lowest it has been in eight years?
Let’s dive deeper and look at the challenges that the petroleum industry has faced in 2020 and early 2021 and the petroleum industry developments to learn more.
Two Major Factors Impacting the Petroleum Industry
The petroleum industry has had some significant setbacks from 2020 to the beginning of 2021. When watching the news or reading petroleum industry articles, you may notice that the two major factors that impacted the petroleum industry in 2020 and 2021 are the COVID-19 pandemic decreasing people traveling and the winter storms in Texas.
The good news is that the petroleum industry is expected to recover from the negative impact of the pandemic. The S&P Global Platt Analytics expects over a 5.5 million barrels per day increase in demand for oil from 2020 to 2021.
COVID-19 Impact on the Petroleum Industry
COVID-19 significantly reduced the demand on the petroleum industry. Stay-at-home orders, travel restrictions, and many schools and jobs working from home traveling decreased dramatically. The decrease in travel leads to a decline in demand for the petroleum industry.
The good news is as more people are returning to a “pre-pandemic” life, the oil demand is expected to recover from this dramatic drop in 2020. More people want to make up for lost trips and travel again, and the demand for the petroleum industry is quickly recovering in 2021.
Winter Storms Challenges
Unfortunately, the beginning of 2021 did not start great for the petroleum industry things were beginning to look up, and starting to see the light at the end of the tunnel for the pandemic, the winter storms hit Texas.
The winter storms left many homes and businesses without power for several days hurting the petroleum industry.
The winter storms caused Texas to experience exceptionally cold temperatures. These exceptionally low temperatures cause the natural gas pipelines to freeze.
The freezing of the natural gas pipelines meant that the power plants were out of the fuel they needed, leaving homes and businesses without the energy they needed to run and operate. This caused a halt to the petroleum industry in Texas until the temperatures warmed up.
Although this storm greatly impacted the petroleum industry during the first few months of 2021, led the government to make changes to prevent another winter storm from causing havoc to the petroleum industry again.
Since the Texas weather winter crisis Greg Abbott, the governor of Texas, has issued a directive for laws and funding to help winterize natural gas power companies to prevent this from occurring again.
Petroleum and Chemical Industries
Petroleum and chemical industries work closely together to make the oil and gas needed for our vehicles and machines. Petroleum is made up of several chemicals and minerals. Some of the chemicals and minerals in petroleum include:
With so many chemicals and minerals that make up petroleum, it is crucial to have a way to monitor and analyze petroleum. Light Element Analysis in Central Lab is a great tool that the petroleum industry can use to test for these elements and more.
The Future for the Petroleum Industry
The petroleum industry had some major setbacks in 2020 and the beginning of 2021. From a pandemic to winter weather crisis the petroleum has had to overcome many challenges. The good news is that the petroleum industry seems to be already catching up and is starting to rebound already.
Between new laws and funding to help in case another winter storm happened in Texas and advanced analysis tools for petroleum testing, it seems like there are many positive petroleum industry developments and petroleum industry trends occurring in 2021.
Did you enjoy this article on the petroleum industry for 2021? If so, make sure you check out our other articles available.