Oil Prices’ Impact On Jobs
Oil prices also have an influence on jobs. In the US alone, more than 127,000 people are employed in the oil and gas extraction industry, which is labour intensive. From petrophysicists to engineers, from drilling crews to truck drivers – a large workforce is engaged in the industry. Plus, there are hotels, restaurants, grocery shops, and more near the extraction fields – an integral part of the overall oil and gas industry,
The numbers are much higher in the Middle East nations and Russia. Indeed, many depend on the oil and gas industry to earn daily bread. And a change in oil prices could impact their livelihoods.
The rising costs of oil are pushing countries to invest more funds and employ more people in the sector to find newer oil sources within their territories, leading to a massive generation of employment.
In contrast, low oil prices could lead to massive firings in the industry, crippling the local economy as well. For instance, in 2020, amid the onset of the Covid-19 pandemic, Saudi Aramco, the world’s leading exporter of oil, had cut hundreds of jobs, as oil prices tumbled to record lows.
Oil Prices and the Global Economy – Cause & Impact
Oil prices in the past few weeks have surged to more than $100 a barrel in the backdrop of Russia’s attack on Ukraine. The rising oil prices have yet again shown the world how important it is, as global economies search for cheaper deals to fuel their nation’s growth. India and China are picking up cheap Russian crude. Whereas, Western countries, which are said to be discouraging their oil purchases from Russia, are reportedly using the exceptions and exclusions in the sanctions so that they can continue using the Russian crude – a step signifying how crucial oil is for their economies to be up and running.
Table of Content
- Heavy Reliance on Oil
- Oil Demand Grows as Economy Grows
- Impact on Oil Importers
- Oil Prices’ Impact on Cost of Doing Business
- Oil Prices’ Impact On Jobs
- Oil Prices’ Impact on Banking Sector
For countries already in economic distress, it’s a double whammy. For instance, Sri Lanka, which is on the verge of the brink of bankruptcy, increased diesel and petrol prices by SLR 75 per liter and SLR 50 per liter, respectively, in a single day to offset the rising costs of the fuel.
Other nations too are finding ways to deal with an unprecedented rise in crude oil prices. In the current scenario, the question is – How do oil prices impact the global economy? – becomes all the more relevant.
In a bid to provide our readers with a brief on why the world revolves around oil, why crude plays such a pivotal role, and how its shortage can play havoc; here we have listed a few major reasons: