Global Overview of the Energy Industry

October 2021

The energy industry experienced difficult market conditions in 2020, given falling crude oil prices and lockdown-induced disruptions in refined petroleum consumption. The year also saw an increased focus on developing the industry’s sustainability goals. With vaccine roll-outs and the easing of mobility restrictions, the industry is starting to recover in 2021. Global demand for fossil fuels is set to continue expanding over the long term, driven by the expansion of economies in Asia Pacific.

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Key Findings

Digitalisation

Digitalisation is able to reduce manufacturers’ operating costs, while improving efficiency, workplace safety and continuity of operations in the event of major disruptions, such as the global pandemic in 2020.

Decarbonisation efforts and renewable focus

As climate change and sustainability in manufacturing is an increasingly important topic in global economies, large market players have to find ways to reduce their emissions and adapt to the changing environment. Stricter environmental policies and emissions goals are not only pushing oil, gas and coal producers to invest in technological advances but also to focus their investments on renewable energy.

Consolidation in a low-priced environment

The outbreak of the COVID-19 pandemic had a severe effect on global crude oil prices. To cope better with reduced demand and stalling operations, companies were forced not only to cut operating costs but also, in some cases, to turn to mergers and acquisitions in order to avoid bankruptcy.

Focus on infrastructure

With the expected rise in global fossil fuel consumption, investment in new infrastructural channels and the upkeep of existing supply networks is essential in order to avoid future shortages.

 

Scope
Examining four trends shaping the energy industry
COVID-19: impact on energy industry
Energy industry hit hard by COVID-19-related demand shocks
Relatively slow recovery to pre-pandemic industry revenue levels
China and US continue to dominate global industry
Cost discipline to continue as profits remain under pressure
Exports hit by demand shocks in 2020
Expanding economies in Asia Pacific to drive energy import demand
Energy demand growth concentrated in Asia Pacific
Chinese oil and gas companies lead the global market
Total number of companies declines due to consolidation
Industry concentration to increase amid tightening environmental regulations
US, China and Canada to drive future production value growth
Eastern Europe and Asia forecast to swiftly recover from COVID-19 shock
Key future trends shaping the global industry
Decarbonisation and renewable focus in more detail
China: Industry to recover to pre-pandemic levels by 2022
Energy producers in China to benefit from expanding demand for fossil fuels
US: Projected high growth rate over the long term
Energy industry struggles to reach pre-pandemic levels despite recovery in 2021
Russia: Industry affected by COVID-19 disruptions
Russia is looking to boost gas exports to China
Saudi Arabia: Industry remains resilient to COVID-19 shock
Saudi Arabia is looking to gain further market share in Asian countries
Iran: Exports hit by 2018 sanctions
Iran’s energy industry’s outlook highly optimistic
India: Industry set for swift recovery
Expanding demand for fuels leads to investments into energy industry
Canada: Industry slow to recover after dip in 2020
Energy market consolidates with tighter environmental policies and subdued consumption
Japan: Industry set to see stagnation
Japanese domestic energy market is set to continue contracting
Australia: Industry is set to struggle to recover
Shrinking refining and uncertainty regarding coal
United Arab Emirates: Industry to see recovery after crash in 2020
United Arab Emirates energy industry to expand with solid investment
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