Energy transition and geopolitics to ‘weigh heavily’ on oil & gas industry in 2023

Data and analytics company GlobalData has revealed 20 themes impacting the oil and gas industry in 2023 with geopolitics and energy transition seen as the most pressing ones, which are reshaping the energy supply chain.

Illustration; Source: GlobalData

GlobalData outlined in its new report, titled Top 20 Oil & Gas Themes 2023, the 20 prominent themes impacting the oil and gas industry in 2023. With geopolitics becoming a pivotal macroeconomic theme for the oil and gas industry ever since the start of the Ukraine crisis, the fallout of this conflict is “critically” impacting the supply chain theme as newer alliances are being forged, says the report.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, remarked: “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.”

Despite this, Global Data claims that oil and gas companies will continue to pursue new 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).

“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,” added Puranik.

Source: GlobalData

While environmental, social, and governance (ESG) is increasingly becoming integral for large enterprises – even more so for high carbon-emitting companies in the oil and gas industry – the report points out that the industry aims to strike a balance between environmental commitments and global energy supply.

Aside from this, traditional oil and gas themes – liquefied natural gas (LNG), shale, and integrated refineries – are expected to enable the energy market players to remain competitive. GlobalData emphasises that these themes are at major crossroads with their utility counterparts in the energy sector.

Although LNG and shale will continue to play “a critical role” in global energy security, according to the report, integrated refineries theme also signals the changing demand patterns in the downstream refining and petrochemicals sector.

In addition, the report highlights that artificial intelligence (AI), blockchain, cloud computing, cybersecurity, the Internet of Things (IoT), robotics, and the metaverse will be “the disruptive tech themes” impacting the industry.

“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,” concluded Puranik.