SUPPLY SIDE OF CRUDE OIL

Supply Side of Crude Oil



Supply of Crude Oil

Introduction

Crude oil has become a very important source of business and foreign exchange in the market. The core focus of this paper is to identify and discuss the core factors that affect the supply side of crude oil with respect to the region of United Kingdom. A very important point to note is that the global factors also affect the supply of crude oil in this region which are discussed as follows.

PESTLE Analysis

PESTLE Analysis is a mandatory requirement when it comes to assessment and analysis of the external environment where the company is having their business operations. It is only after a thorough assessment. The crude oil industry of United Kingdom would be in a position to conduct their business operations in the future. Therefore, the description of the five factors of PESTLE Analysis are discussed as follows.

Political

In a PESTLE analysis, the biggest factor is the political aspect of the county. The legislation carried out by the UK government creates an impact on the business operations. Though, in UK, the stability is a major factor and the UK government is also very responsible in this regard. The business firms experience an impact of the political factors to a very large extent. Therefore, it is vital for the UK crude oil industry to assess the political factors in the best possible way.

Economical

Economic forces have a significant impact on company operations this include the GDP. It refers to the total annual value of production of the products and the supply and demand of crude oil across the nation (Parra, 2004). The reasonable level of economic growth produces a positive impact on the economy and all the organizations experience benefits in this regard. Therefore, UK crude oil industry needs to prepare an effective strategy for meeting all the economical factors in the future.

Social

Social forces include the traditions, values, social trends, consumer psychology and social expectations that have endured for decades and even centuries. The values are relative concepts that society holds in high esteem, they and social trends can be presented as threats, opportunities or constraints, for example, demographic changes, social expectations, etc. It is obvious that the UK crude oil industry cannot ignore the social factors of the country and must prepare a business strategy by considering all the aspects in this regard.

Technological

The forces include developing technological and scientific innovation that provides opportunities, threats, and restrictions on businesses. The rate of technology change varies considerably from one sector to another. Changes in technology may affect the operations of a firm and its products and services. The advancement of technology has also taken place in recent years that have enabled the improvement of the business operations. The UK crude oil industry also needs to implement technological applications in this regard. In this way, they would be able to compete well in the global industry and cope with the changing international business ...