How Oil Industry Works
Oil industry is one of the important industries in the world that was started thousand years ago. Oil sipping is the main objective of the industry that is converted into several uses.
Determining how oil industry work will help understand why all the prices of basic commodities are affected by its price.
The Pros and Cons of Oil Industry
The oil industry provides us one of the basic commodities in daily life. Definitely, companies would not operate without oil that is why the oil industry is giving big share in the world economy. The oil industry came into existence thousand of years ago where it was used when painting different things. Despite of the vastness of the industry, there are times when the supply of oil is lower than the demand in such a way that it cannot meet the demands of the consumers. Evidently, the oil industry is a major component of the world’s economy. Generally, it directly affects the prices of the different products. This means that when the supply is low the price of the oil will increase and eventually the prices of other basic commodities increase. Likewise, oil production takes into account the large amount consumption of energy.
On the other hand, the oil industry does not only provide positive output but it also contributes negative output. This is because oil industry has a great ecological impact from the drilling, exploration and processing of the product. The seabed ecosystem was disturbed during the pipeline and rig installations. Thus, the underwater structures were damaged due to the toxins released in the water. Nevertheless, according to statistics almost 25 percent of oil consumption all over the world is consumed by the United States. There are two parts of the oil industry that is the Upstream and Downstream. Although it is difficult to identify the importance of oil yet it is important for human beings.
Moreover, the oil industry is not only important for larger companies but also to the transportation sector. Can you imagine what it is like without transportation? Obviously, most transportation methods use gasoline and crude oil that is produced by the oil industry. That is why when the price of oil increased in the international market it directly affects even the local consumers. However, this situation cannot be avoided as the price of the oil will continue to increase due to the limited supply of oil.
In like manner, we should also think that the exploration of the oil industry for possible location spends big amount of money. Thus, the expenses incurred by the company are passed to the consumers in the form of higher prices. With all the information stated above it is just right to use wisely the product as well as protect our environment.