Why Oil is Still Important in This Economy

The oil industry has a great impact on the world economy. Ideally, the price of oil and gas affects the entire economy. Remember that oil and gas are both useful to businesses and individuals. Some countries depend on oil and gas fully. For such countries, there is a need for the oil and gas sector to thrive. There are still a lot of challenges that companies involved in drilling and exploration face. For instance, Lundin has been accused of many crimes. However, Lundin says the allegations are absolutely false. These are the top reasons the oil and gas industry is still important in the world’s economy.

Major Source of Energy

oil refineryRecent studies have shown that oil and gas provide more than 50% of the energy in the world. Therefore, they are important resources. In fact, if there is no oil and gas, the world can come to standstill. Even though there are sustainable or renewable energy resources, none of these can contribute a huge amount of energy as compared to oil and gas. Also, some energy sources are quite expensive, unreliable, and difficult to obtain. As a result, oil and gas ensure that most countries can sustain their operations.

Needed for Energy Independence

When a country is not producing oil and gas, it becomes dependent on other countries for supply. When this occurs, the economy is controlled by regulating the price of their imports as most require oil during production or transportation process. As you know, OPEC is a cartel of oil-producing countries that are known to control the production and supply of oil.

The need for cheap oil and gas can help improve the economy of any given country. A country with oil reserves can tap into them and start exporting oil and gas, instead of importing it. As a result, more money is pumped into the economy instead of it getting out. The good thing about exporting oil is the profit margins it has. Also, when a country produces oil, it can lower its costs to improve the entire economy. When the price of oil and gas is reduced, it becomes easier to produce goods cheaply.

Countries that produce oil rely on the strength of this industry. As the industry keeps expanding, there is a need for countries to invest in it. Investments can be directed into drilling and pipelines. The use of modern technology helps lower the operation costs of oil and gas transportation, production, and drilling. That explains why many countries are investing in modern pipelines to reduce the cost of transportation.…

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Benefits of Investing in Natural Resources

Natural resource investment has become a big venture in the market currently. The good thing about this kind of investment is that the options are not limited. Besides, there are numerous natural resources, all with demand, such as precious metals and gas. Moreover, you can easily identify a resource that has not been exploited and turn it into a profitable venture. Most of these resources are found in developing countries. Also, the labor in such areas is still cheap, making your investment very viable. Below are some of the benefits of investing in natural resources, as indicated by CEO Alex Schneiter with Ian Lundin.

Grow Income Among the Locals

income-money

Usually, most of the natural resources are available in places with little to no civilization at all. Therefore, investing in such areas will be a good way of promoting income and growing the locals’ living standards. Furthermore, the moment you set up a manufacturing factory, it will mean that you will absorb the people in the area to work in your plant. Labor is normally affordable, especially for jobs that do not need many skills. As a result, you will raise their income and encourage them economically.

Political Relations

Natural resources investment means you are aiming to go beyond the borders. In most cases, investors are likely not to be locals. They are foreigners from other countries, usually more developed than the natural resources nation or state. It, therefore, becomes a good way to grow and strengthen political relations. Additionally, when the country accepts to have investors from another nation, it will encourage the inter-country ties for mutual benefits.

Growth of Infrastructure

power lines-infrastructure

Exploiting natural resources leads to infrastructure growth in the region eventually. When the investors visit the nation’s remote parts in search of natural resources and then set up a manufacturing plant, urbanization is inevitable in such areas. Moreover, the site is opened up with the plant’s set up, and other facilities such as water and electricity become a necessity. Therefore, it will be expected that the roads will be developed, building of urban houses, great sewage system, among other urbanization features.

 

Conclusion

The reasons for natural resources investment have always been compelling. Whether it is coal, gold, or lumber, the resources are at the center of production. Furthermore, the range of investable resources is increasing since the world population needs more resources. Besides, investing in natural resources now ensures that your future investment is guaranteed. The resources being exploited at the moment could be a scarce commodity in the future. Therefore, as demand increases, the prices too will increase.…

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