Essays on The Future of the Petroleum Liquids Energy Industry Segment Case Study

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The paper "The Future of the Petroleum Liquids Energy Industry Segment" is a perfect example of a business case study. The global market topography is gradually changing. In this case, technology changes and globalization have played a critical change role. One of the most affected industries is the petroleum and liquid energy industry. Traditionally, the petroleum and liquid industry demand was in the EU and the USA where the level of economic development was relatively high. As such, oil and liquid energy multinational organisations focused on mining and availing these products to the developed markets (Taverne, 2008, p. 67). However, the industry market structure is changing with increased petroleum and liquid energy products demand rise in the Asian as well as the African markets.

Moreover, the potential of new supply areas in tight and shale resources is bound to alter the petroleum liquids industry in the future. As such, this analysis establishes that there is a need to evaluate the expected dynamic market changes in the industry, to allow strategic management approaches for the industry stakeholders. As such, this report develops a critical evaluation of the petroleum liquids industry evaluating its current situation, as well as expected future development opportunities.

Moreover, the analysis evaluates the risk elements in the forecasted industry future developments. 2.0 Current Market Situation Analysis In order to analyse and evaluate the current external market conditions and the situation in the petroleum liquids industry, this report section develops a macro-environmental analysis through a PESTLE tool application. The use of the PESTLE analysis tool is based on the argument by Henry (2011, p. 22) that the tool comprehensive and diversified approach allows for a critical factor assessment. 2.1 Political Analysis A key political player in the oil industry is OPEC (the organisation of petroleum exporting countries) that controls an estimated 40% of the global petroleum liquids mining.

The geopolitical control on the petroleum liquids by market share is demonstrated in the chart below. (Dan, 2013) In this case, the geopolitical alignments and the influences of the organization and the projected increased influence in the market is a key determinant of quantity mining as well on the liquid product prices. 2.2 Economic Analysis The oil industry and global economic development are intertwined and depend on each other.

In this regard, while as the oil industry relies on a growing economy to increase sales, the economy relies on the industry to provide relevant energy to fuel production and development. This scenario is best illustrated through the 2008 global financial crisis, where a barrel price dropped from $147 in 2008 pre the crisis period to $ 50 per barrel in 2009, at the height of the global financial crisis (“ WTRG Economics” , 2011). However, stabilizing economies since 2010 have evidenced a rising price per barrel, although the prices are yet to stabilize. 2.3 Social Analysis Despite the rising living standards globally, the petroleum oil industry market share remains relatively static.

As such, this is due to the rising health concern and the rising trend for a healthy living environment. These changes and the search for alternative energy sources have remained a key industry threat as it's expected to decline in market share and profitability values in the future (Patterson, 2014). This decline in demand is demonstrated in the chart below where the demand for crude oil has been on a gradual decline.

References

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