In 2017, employment in the oil industry saw both some stagnation and some significant redundancies that reflect, perhaps, the general industry downturn. Consultants to the oil industry believe that as many as 500,000 jobs have been cut globally and the question being asked by many is will the downturn in the industry continue in 2018 or are there reasons for optimism? Here we examine the 2018 outlook for the oil industry and employment opportunities therein.  

What the Industry Thinks

A recent survey of 1000 workers in the oil industry revealed that over 46% of those who responded thought that the most significant opportunities for employment in 2018 lay in the upstream sector. Around 22% said they believed that none of the sectors showed signs of increased employment opportunities, 16% chose the midstream sector and just 15% the downstream sector.

These clear differences of opinion, however, do not necessarily mean that there is apathy or even despondency among the workforce. In the same survey a combined 62% of workers outlined their sentiment for the 2018 outlook as being “hopeful” or “optimistic”.

In terms of employment concerns, the survey indicated that 30% of those currently working in the industry were feeling pessimistic and were worried.

The Price of Oil

It could be argued that the results of the survey are paralleled by the performance of oil and its price on the global markets. After a fairly robust start to 2018, the price fell significantly towards the end of January, but since then it has rallied somewhat and is looking fairly stable, with a current price of around $65. This is mainly because demand for oil has been strong over the past few months, but the global picture is starting to change and so sustained stability in the price or indeed a bullish outlook seems to be unlikely.

US production is up and the story is the same in Canada, the UK and Brazil. The output from countries outside of OPEC “is now expected to grow at a faster pace, leading also to an upward revision in y-o-y growth by 0.26 mb/d to average 1.66 mb/d, compared to the previous MOMR,” reports OPEC.

While increased global production may look like good news for employment within the industry, in the short term, it may, of course, lead to a drop in demand and drive the price of oil back down again. Furthermore, there are some disruptive factors that may come into play.

Disruptive Factors

Reports that Russian President Vladimir Putin has indicated that Russia may soon withdraw from the OPEC oil production cut deal and this would leave it free to ramp up production. Other factors that could see oil production increase includes that news from Ghana, where a boom is said to be imminent.

These disruptive factors are, again, likely to create some employment opportunities, but are unlikely to support the stance taken by Saudi Arabia who are pressing for the price of crude oil to be set at around $70 per barrel.