Oil field services jobs could reduce by 20 percent due to low prices, pandemic

petroleum revenue
oil money

One out of five oil-field services jobs could disappear this year as decades-low prices and the COVID-19 pandemic hammers the industry, U.S. local newspaper reported Wednesday.

Houston Chronicle quoted a report from Norwegian research firm Rystad Energy as saying that the oil services sector employs more than 5 million people worldwide and the current crude oil price downturn could cost the sector 1 million jobs worldwide.

The oil services sector includes drilling rig operators, equipment manufacturers and hydraulic fracturing crews, and offshore workers, among others.

According to Rystad’s analysis, nearly two-thirds of the job cuts are attributed to crumbling oil prices while the remaining one-third are attributed to measures being taken by contractors to slow spread of the coronavirus at worksites.

Rystad expects the largest number of job cuts in 2020 to come from oilfield service companies that serve the U.S. shale industry.

Rystad’s report came as numerous exploration and production companies are cutting drilling budgets in response to rapidly falling oil prices, affecting oilfield service companies.

Earlier this month, a failure to strike a deal on oil production cuts between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, had sparked fears of a possible price war. Oil prices plunged as Saudi Arabia, a key OPEC member, and Russia announced a significant increase in oil production.

The spread of coronavirus pandemic worldwide also added to the fear of slowing global economy, which will lead to a weak demand of oil. Enditem

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