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.