This is the million dollar question for those of us living in Alberta, Texas, Norway, Russia or any other area that is heavily dependant on the price of oil and gas! Will the price of oil collapse further or begin to recover? Seeing the price of oil stuck floating between $40 and $50/barrel is painfully frustrating. As leaders in businesses that depend on a strong oil market, we want to see the price of oil rise above $75/barrel so that our business can begin to grow and flourish like they were over the last 5 years. And, we would like to understand how quick this recovery will happen so we can better position our companies for this recovery.
I recently did a Google search on “collapse of oil prices” and it returned 24.1 million search results. I then did a search on “recovery of oil prices” and Google returned 52 million search results! So, who is correct? Are the prices going to go up or are they going to collapse even further? Perhaps we could have answered this question a little easier 30 years ago when the world wasn’t as globally connected and not nearly as complex as it is today. However, in today’s world, no one person, entity, corporation or country is controlling the price of oil. Today the price of oil is dependant on a complex interaction of politics, technology, corporations, geopolitical unrest, growth demand projections, catastrophic weather events, etc.
So then maybe I was asking the wrong questions.
Maybe, as business leaders we need to start asking a different set of questions;
- What can I do to streamline my business and prepare it for this season of lower energy prices?
- Are there opportunities in adjacent market spaces where my business can provide value?
- How can I lower the cost structure of my business while providing the same or a better level of service to my customers?
- What are the opportunities being created by the lower oil prices that I haven’t seen yet?
- What existing industries will expand because of the lower cost of energy?
- What new industries will be created because of the lower energy prices?
The one thing we know for sure is that change is inevitable. The price of oil will always collapse and it will always recover. This cycle will continue until oil is replaced by an alternative, revolutionary new energy source. Until that time, rather than being consumed by the collapse and recovery cycle, leaders need to be focused on what changes they can make to sustain and grow their businesses in the midst of the oil cycle.
What changes do you need to make this week to keep your business thriving during this oil price downturn?