Between low demand, soaring inventories, depressed prices, a global pandemic, and now, hurricane season, it seems a perfect storm is forming around the offshore oil industry. The world’s offshore oil market, responsible for 30 percent of all the world’s oil production, is facing an impossible set of challenges. With oil sitting at half the price of its yearly high, and doubts forming around the future of demand, in addition to the ongoing COVID-19 pandemic wreaking havoc on the global economy, companies are struggling to rein in capital spending and are beginning to rethink the future of key projects.
The crisis has pushed much of the world’s oil production onshore in favor of more flexible rigs and lower operational costs.
Many new offshore projects have even been put on hold as the new reality of the oil market sets in. Companies are now scrambling to suspend federal lease deadlines as the near-term looks increasingly uncertain.
The industry’s growing troubles come just as Royal Dutch Shell was forced to airlift a number of coronavirus-infected employees from one of its offshore platforms, highlighting the risks associated with confining workers on offshore rigs during a pandemic.
And Shell isn’t the only company grappling with outbreaks.
Last updated on Sun., May 31, 2020.