Is Growth Still Possible with the Oil Downturn?

Over the past year the oil industry has been hit with blow after blow, with crude prices slipping to around $45 last month. The global market has been drastically destabilised, with producers scrambling to kick-start the recovery. Yet progress is slow, and motives don’t always align.

While most major producers are calling for a cut on global production, Iraq isn’t on-board. Just days ago the country’s oil minister triggered yet another price wobble when he cast doubt on whether or not Iraq would join the embargo.

Not all Opec members on-board

According to Jabar Ali al-Luaibi, Baghdad wants to exempt itself from Opec production cuts as Iraq would be producing 50% more than its current output “if it wasn’t for the wars.” As a result, Brent crude, the international oil price benchmark, slipped to below $52 a barrel, which marks a 3% drop from its highest 2016 settlement recorded in early October.

But despite the negative atmosphere, oil and gas giants like BP remain optimistic. In fact, BP asserts that current oil prices in the $50 range are not a blocker to growth. Not only has chief executive Bob Dudley promised to break even, but it plans to increase its investments in new oil exploration projects.

"At today's prices, we have to maximise efficiency and minimise costs. We have to focus on the highest-quality projects and develop them with great capital discipline," he avowed at a recent London conference.

Can BP break down barriers?

Of course, there are major barriers in the way, and there’s no guarantee that Opec’s calls to cut production will be formally signed. There is national rivalry to take into account, with nations like Saudi Arabia and Iran finding it difficult to cooperate. Iran is also resisting, with representatives threatening to continue production until its market share reaches pre-sanction levels.

Whether or not BP can both break even and increase investments in the current landscape will largely depend on its abilities to act as a mediator, and encourage the development of a healthier oil market.

With oil prices far from stable, there’s been an increased focus on how to maximise efficiency. ‘Accurate and Precise Quality Control for Lubricants and Fuels by EDXRF’ explores the latest developments designed to optimise engine and machine performance, while maintaining the best-possible protection of the natural environment. The article spotlights the importance of understanding the content and composition of accompanying elements and additive metals, and how X-ray fluorescence (XRF) analysis is the ideal method to accomplish this.