Editorial: Jobs Slashed & Silver Linings Snubbed In A Worsening Oil Environment
“Too many people miss the silver lining because they are expecting gold” – Arthur Yorinks (1953 - )
As North Sea oil producers warned that the sector may see a further 10,000 jobs axed before the end of 2015, the price of a barrel fell on weak economic indicators coming out of China and promises of growth from a resurgent Iranian oil industry.
The People’s Republic has posted its worst quarterly growth in six years, stoking fears that the world’s second largest consumer of oil will require a lessened demand for the black gold.
In news coming out of Tehran, Iranian Oil Minister, Bijan Namdar Zangeneh, affirmed that the Middle Eastern nation would be ready to up its daily production by half a million barrels to 3.9 million barrels per day (bdp) merely a week after a sanctions over its nuclear programme are lifted.
If projections are correct, the 50 per cent dive in oil prices will have cost 41 per cent of the 37,000 people working directly in the UK hydrocarbons sector their jobs since 2014. In the US, statistics published in August showed that 70,000 oil and gas jobs were slashed in the oil and gas industry in the first half of 2015, amounting to a quarter of all job losses in the country in the time period. With oil prices set to gravitate around the $50-$60 mark for the foreseeable future, it is debatable how far the attrition can continue before it goes from feasible to near fatal.
Of course, as low oil prices gnaw at national and corporate bottom lines, the weeping and gnashing of teeth extends beyond the boundaries of the business world and into more insalubrious realms, namely the black market.
As we recorded here, a year ago Islamic State (IS) was making some $2,700 per minute from the sale of oil in its territorial holdings. Today it is estimated that they are making one third of that amount. That said, IS is still purportedly raking in $15 per second through illicit sales to buyers in Syria, Iraq and Turkey. Of course, according to sources inside the US Department of Defence, prosecuting the war against IS is costing the allied powers $100 per second.
While some people might miss the proverbial silver lining from time to time, it seems that the skies are seldom sewn with clouds in any case….
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