It’s looking like there is light at the end of the tunnel for our beleaguered oil and gas industry.
The Organisation of the Petroleum Exporting Countries (OPEC) have agreed to reduce production, which will in turn increase the price of crude oil.
Sadly this lifeline has come too late for a number of local businesses who have been forced to cease trading with the loss of jobs.
But the positive side is we still have many Aberdeen-based companies who will undoubtedly benefit from the marginal decrease in production and will be able to retain their workforce and in the longer term grow their businesses once more.
What we’ve seen since 2014 has been an imbalance between production and consumption, the consequences of which were the dramatic fall in the price of oil.
Providing all OPEC countries fulfil their commitment to a reduction, this should take production down from 33.6 million barrels a day to 32.5 million.
It doesn’t sound a huge difference, but when you think that the difference between production and consumption was only 5%, the reduction suggested will balance supply and demand and push up the price of oil, upon which Aberdeen is so dependent.
For Aberdeen and the North-east, the drop in the price of oil has meant cost-cutting on a massive scale, with thousands of people being paid off, not just in the oil sector but in hotels, restaurants, shops, and so on.
Inevitably this has had an effect on every section of Aberdeen’s society, with spending down and unemployment up. However, things are now starting to look better and the potential for North-east-based companies is huge, providing we attack the international markets such as the Gulf of Mexico and Asia with renewed vigour.
We need to get out there and sell hard in a competitive market, but in the full knowledge we have world-class cutting-edge technology which our competitors can only hope for.
This article originally appeared on the Evening Express website. For more information, read about our new combined website.