27 Sep 2020

Oil Markets in the Post-Covid-19 World

Mohammed Hamdaoui

The scale of the socio-economic impact of the Covid-19 pandemic on the global economy has not been witnessed since the Great Depression. Isolation measures, implemented across the globe to contain the virus, confined hundreds of millions of people into their homes, bringing economic activities to a standstill. This crisis has impacted the oil and gas industry in an unprecedented manner. A massive decline in oil demand and a large oversupply, intensified by the price war between Russia and Saudi Arabia, has sent oil prices to levels unseen in decades. While the oil industry has faced several crises that have pushed it to find new ways to conduct business and adapt to changing conditions, the Covid-induced crisis has come when the industry is dealing with increased shareholder activism and intense pressure on the environmental front. Since this is a new phase for the industry, it could also become the catalyst that accelerates the transformation it has started to go through.

Oil will continue to play an essential role in the energy mix for many decades. However, oil companies will have to navigate and manage an uncertain future as oil and gas projects will be riskier to develop and consequently require a higher rate of return. They will have to diversify their portfolios and continue shifting toward an integrated business model that embraces the changes caused by the energy transition and the growth in renewable and new technologies.

covid_19 economy

ABOUT THE AUTHOR

Mohammed Hamdaoui is a member of the Economic Studies Department at the TRENDS Research & Advisory. He is an energy, metals, and mining industry expert with over 15 years of experience analyzing different aspects of the industry, including supply and demand, price forecasting, cost analysis, resources monetization, market studies, and natural resources strategies. He conducts economic analysis of different industries and participates in various studies spanning multiple sectors.

Before joining TRENDS, Mohammed was an Energy Researcher at the ECSSR, a Research Director, Commodities Analytics, at Wood Mackenzie, a Planning and Financial Analysis Manager at AAEC, and Business Development Analyst at Syntroleum. He started his career at Unilever as an IT Project Manager. Mohammed has worked and managed teams in four different continents. He earned a Bachelor’s/Master’s degree in software engineering from Ecole Mohammedia des Ingénieurs in Morocco, and an MBA and an MS-MIS from the University of Oklahoma. Mohammed is fluent in Arabic, French, and English.