GlobalData Says These Themes Will Dictate Oil and Gas Outlook in 2024

Geopolitics and supply chain dynamics will dictate the oil and gas outlook in 2024.That’s according to GlobalData, which said in a release sent to Rigzone that the oil and gas industry has witnessed a considerable upheaval in its supply chains amid the protracted Russia-Ukraine conflict and renewed tensions in the Middle East.

“Both of these conflicts could potentially disrupt global oil and gas supplies in 2024, and hence, the themes of geopolitics and supply chains are the hot topics for this year,” GlobalData noted in the release.“It is therefore important for the oil and gas industry to assess the impact of these themes while charting out their growth plans,” the company added.

In its release, GlobalData outlined that a recently released thematic report from the company revealed “the leading themes that could have a significant impact on oil and gas operations in 2024”. The report outlined several “key players”, including BP, Shell, TotalEnergies, ExxonMobil, Chevron, Eni, Equinor, PetroChina, and Saudi Aramco.

Energy security concerns are expected to be the major driver for the oil and gas trade in 2024, GlobalData said in the release, adding that the pace of the global transition towards clean energy is likely to be slow in 2024, “as several countries are confronted with issues of energy security and inflation”.

A chart showing the “biggest themes driving growth in the oil and gas industry in 2024”, which was included in the release, listed several categories and subjects. Under “industry themes”, carbon capture and storage, energy transition, and innovation were listed, under “macro themes”, the global macro outlook, regulation, and Covid-19, were listed, and under “technology themes”, 3D printing, AI, and big data were listed. Under “ESG themes”, ESG environmental, ESG social, and ESG governance were listed.

Ravindra Puranik, an oil and gas analyst at GlobalData, said in the release, “the fallout of the Russia-Ukraine conflict has resulted in the restructuring of global energy supply chains in the last two years”.“Moreover, global energy markets must also have to contend with rising tensions in the Middle East. Thus, geopolitics and supply chain dynamics will impact the decision making of oil and gas companies in 2024,” Puranik added.

Profitability is expected to be critical for driving the financing of decarbonization initiatives in 2024. Moreover, the Ukraine conflict has also exposed the vulnerabilities in clean energy generation and, in a way, pushed back the prospect of peak oil for the time being,” Puranik continued.“This is also likely to benefit natural gas and LNG in supporting global decarbonization goals in the medium term,” Puranik went on to state.

Oil and gas companies are expected to continue to expand the deployment of digital technologies across their operations in 2024, the GlobalData analyst noted in the release.

“As the industry prepares to become agile and pursue a long-term energy transition, digital technologies will play a pivotal role in achieving these objectives,” Puranik said.In a release sent to Rigzone back in April 2023, GlobalData noted that geopolitics and the energy transition were the most pressing themes for the oil and gas industry that year.

“Geopolitics has become a pivotal macroeconomic theme for the oil and gas industry ever since the start of the Ukraine conflict. The fallout of this conflict is also critically impacting the supply chain theme as newer alliances are being forged,” GlobalData said in that release.“Nevertheless, oil and gas companies will continue to pursue newer industry themes that support the energy transition towards zero emission technologies, such as renewables, low-carbon hydrogen, carbon capture and storage (CCS), and electric vehicles (EV),” it added.

In that release, Puranik said, “the current geopolitical conflict in Eastern Europe is deeply impacting the global oil and gas industry and reshaping its supply chains”.“In this environment, industry participants need to sense the scenarios that could either diminish their profitability or open new market avenues,” Puranik added.

“The ongoing transition towards clean energy sources will also weigh heavily on the oil and gas players. Themes, such as renewable energy, and electric vehicles, are major disruptors to the industry, while CCS and low-carbon hydrogen will create new opportunities for oil and gas players in the coming years,” Puranik continued.

“In the midst of ESG, macroeconomic, and industry themes impacting the oil and gas industry, technology themes will continue to shape operational capabilities in this decade. Timely and methodical investments in tech themes could provide competitive advantages for oil and gas players,” the GlobalData analyst went on to state.