Oil & Gas Business Cycle | Why business acumen is important to the oil & gas industry?

Why is business acumen important for the oil and gas industry? It's an industry that's extremely dynamic. And literally every year the business priorities shift. One year it's growth as fast as can. The other year it's capital efficiency and cost-cutting. The next year it's all about free cash flow. And it depends on the business cycle, it depends on the economic environment in which the company is operating, and it's a very cyclical industry.

Right when covid began in January of 2020, two months before covid, there was really a quite interesting dynamic happening between the Middle East and Russia. They got into a little bit of a price war. They were fighting over market share and disagreed. They both were producing enormous amounts of fuel at the time, and oil prices dropped dramatically. And then covid hit. What happened when the whole world shut down? Consumption of oil dropped dramatically. Trains weren't running, nobody was going on cruises, nobody was flying, and all the consumption drops so supply goes way up demand goes way down. And so then we had a very repressed oil and gas prices during covid.

And so understanding the business where it is in its cycle at this point and how those strategic priorities have shifted, is critical. I have clients who literally every quarter there's major shifts in their financial priorities and they're strategic priorities. So building this skill set to really understand how your company or your customer's company is operating in the strategic and financial objectives of the company at that time, are critical to long-term success in the industry.

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