Oil and Gas Industry Outlook in 2024

How global countries push clean energy initiatives? What will be the outlook of oil and gas industry in 2024? This post will give you an overall picture of oil and gas sector for better investment decisions.

The global picture of energy industry continues to be shaped largely by major factors, namely:

·?????? Geopolitical issues

·?????? Macroeconomic variables such as high interest rates and increasing material costs

·?????? Evolving policies and regulations

·?????? The emergence of new and advanced technologies

These disruptors can have a significant impact on demand and supply, and trade and investment within the crude oil and natural gas industry. Despite these disruptions, global oil demand remains on track to grow by 2.3 mbpd in 2023 and cross the 100 mbpd mark for the first time in history. The demand of electric vehicles (EV) has grown in 2023, with one in seven cars sold being an EV. This simultaneous growth in both petroleum-powered vehicles and EVs reflects regional disparities in demand structure, technology adoption, infrastructure readiness, regulatory policies, and socioeconomic considerations. ?

Oil and Gas Industry in 2023

Global crude oil imports in 2023 were approximately USD 1.6 billion, while exports were approximately USD 1.2 billion. Here’s the list of major countries that imported and exported crude oil the most in 2023.

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Global petroleum gas imports were approximately over USD 800 billion in 2023, while exports were approximately more than USD 700 billion.

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Risks to the Public Credits Outlook 2024

While the overall situation looks favourable, here are some major concerns that could impact the credit outlook in 2024:

1.???? Restricted supply from OPEC+ or expectations of weaker demand growth: OPEC+ is expected to provide restricted supply of oil to the countries. Demand growth is likely to moderate but could soften further with India and China as key drivers.

2.???? Government policies: There will be ongoing and increasing risks of impacts on industry players from taxation, regulation, and policy implementation.

3.???? Credit Benefits for Companies: Internally generated cash flows, shareholder distributions, debt reduction and limiting capital spending are key drivers of recent rating upgrades. Companies could start unwinding these credit benefits if organic or inorganic investments step up materially.

4.???? Environmental Risks: The intensification of environmental risks could potentially affect credit ratings. Oil and gas trade activities are typically the most exposed to uncertainties of the energy transition.?

Given these challenges, oil and gas companies need to find the right tools for manging and monitoring risks involved in trade activities. They also require to understand the impact of climate-related transition risks on the company and its counterparties.

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