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The Trend of Structural Change in the International Oil Industry in the 1980s

The Trend of Structural Change in the International Oil Industry in the 1980s Few industries during the last ten years have undergone such rapid changes as the international oil industry. During this decade, radical changes occurred in the conditions under which international oil companies acquire and trade crude oil. These external events initiated a far-reaching adjust­ ment process that is likely to continue. In addition to changes in the upstream sector of the oil industry (exploration and production), the two quantum jumps in oil prices in 1973 and 1979 have drastically altered the conditions of downstream operations (refining and marketing). Two decades of unprecedented growth in oil demand, which had made the world economy heavily dependent on oil, have been reversed. Since 1979, oil demand has fallen more sharply than total energy demand, thereby reducing the relative importance of oil in the energy economy. While GNP in real terms in the Western industrialized countries (OEeD)i rose slightly (by 3%) from 1979 to 1982, primary energy demand fell by 8%, and oil demand slipped by 19%, or a total of 7 mbd (million barrels per day). These developments forced the oil industry to shrink and adjust to the new environment. The oil industry is facing a two­ sided problem: Under heavy competitive http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Annual Review of Environment and Resources Annual Reviews

The Trend of Structural Change in the International Oil Industry in the 1980s

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Publisher
Annual Reviews
Copyright
Copyright 1984 Annual Reviews. All rights reserved
Subject
Review Articles
ISSN
1543-5938
DOI
10.1146/annurev.eg.09.110184.001103
Publisher site
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Abstract

Few industries during the last ten years have undergone such rapid changes as the international oil industry. During this decade, radical changes occurred in the conditions under which international oil companies acquire and trade crude oil. These external events initiated a far-reaching adjust­ ment process that is likely to continue. In addition to changes in the upstream sector of the oil industry (exploration and production), the two quantum jumps in oil prices in 1973 and 1979 have drastically altered the conditions of downstream operations (refining and marketing). Two decades of unprecedented growth in oil demand, which had made the world economy heavily dependent on oil, have been reversed. Since 1979, oil demand has fallen more sharply than total energy demand, thereby reducing the relative importance of oil in the energy economy. While GNP in real terms in the Western industrialized countries (OEeD)i rose slightly (by 3%) from 1979 to 1982, primary energy demand fell by 8%, and oil demand slipped by 19%, or a total of 7 mbd (million barrels per day). These developments forced the oil industry to shrink and adjust to the new environment. The oil industry is facing a two­ sided problem: Under heavy competitive

Journal

Annual Review of Environment and Resources – Annual Reviews

Published: Nov 1, 1984

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