The oil industry is one of the most versatile industries in the globe. Without it, several industries would face closure. With uncertainty plaguing the oil industry, it has continued to witness massive revenues to a tune of 137 billion dollars a year.
The seeking alpha estimates that oil revenues will rise by 10 per cent in 2019. While this rise will mean a profitable margin for some industries, others will have to increase their prices to avoid narrowing down their profits. Here are five sectors that will be affected by the increase in profit.
Though mostly overlooked, the industry builds over 1.3 trillion dollar structures in the U.S alone. In 2017, the U.S construction industry had employed over 10.7 million individuals. With materials such as bitumen needed in constructing roads and insulating electrical equipment, the sector literary thrives with low petroleum prices.
As of 2015, the global petroleum consumption that went to making plastic was 412 billion cubic feet. Most of these plastics are moulded to nurdles which are then carted off to different companies and transformed to various materials such as pipes, sheets and construction gears.
Mining is a ticking time bomb; this is because most of the extracts got from the ground can’t be replenished. The United Arab Emirates, for example, has the second largest oil reserve in the globe. However, it is estimated that in the next five years its oil will run out. This explains why revenues in the industry have reduced from what they were a decade ago.
Nonetheless, regardless of the decline in revenues, the industry is still a formidable sector that commands a substantial amount of revenues. Currently, the mining industry is worth well over 494 billion dollars.
With over a million jobs in the industry; mining plays a crucial factor in producing metals, petroleum, and gemstones, among others. However, the largest chunk of its revenue comes from extracting the crude oil. Once it has been obtained, it is refined to offer products such as oil and gas.
Industrial based agriculture has been a heavy consumer for oil, usually in motor transport and irrigation. As the world population grows, demand for food has been on the increase. This has created a demand for fertilizer which in turn has allowed massive production; thereby feeding an enormous amount of population.
Though fertilizer accounts for 20 per cent energy use, it is the second most crucial ingredient in agriculture. The most common fertilizers involve a mixture of hydrogen and nitrogen, hence forming ammonia. Hydrogen is a component that is extracted from oil and can be used in various ways.
Currently, over 1500 firms are listed as oil and gas industries – combined they are worth over 4.56 trillion dollars. The fuel industry has continued to hit huge profits which have ultimately seen several industries grow. Once refined, crude oil gives gasoline, diesel, lubricating oil, and jet fuel, among others. Distillates such as Spectra engine oil have allowed the transport industry to witness massive evolutions.
Over 10 per cent of crude oil is used in providing raw materials for the chemical industry. However this only masks the fact that over 80 per cent of all cosmetics come from petroleum products. Currently, it is estimated that between 50 and 80 per cent of women use makeup at one time.
Though this accounts for a majority of the millennial generation, it is essential to note that no matter how natural you want to look, most components such as dyes, deodorants, conditioners, and shampoos are made from petroleum.