SWOT Analysis of the Oil and Gas Industry in 2018
This paper presents a SWOT analysis of the global oil and gas industry amid the economic volatility of 2018. It examines the sector's core strengths—persistent global demand and rising long-term price projections—alongside key weaknesses such as high operating costs and vulnerability to political instability. The analysis identifies emerging opportunities in sustainable business models and diversified energy portfolios, while also outlining threats posed by growing public pressure for renewable energy adoption. The paper concludes by evaluating strategic alternatives, arguing that diversification—maintaining oil and gas operations while developing cleaner extraction methods and low-carbon technologies—represents the most viable path forward for the industry.
- Introduction: Industry Volatility in 2018: Market volatility context and rising oil prices
- Strengths: Global oil dependence and rising long-term demand
- Weaknesses: High operating costs and political vulnerability
- Opportunities: New business models and sustainable energy pivots
- Threats: Public pressure for renewable energy alternatives
- Strategic Alternatives: Diversification balancing fossil fuels and clean energy
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What makes this paper effective
- The paper applies a classic SWOT framework cleanly and efficiently, keeping each section focused on a single analytical dimension without overlap.
- It grounds abstract strategic claims in concrete corporate examples—Total's low-carbon investment plan and Dong Energy's pivot to offshore wind—making the analysis more credible and specific.
- The strategic alternatives section synthesizes all four SWOT dimensions into a practical recommendation, demonstrating how the framework should drive actionable conclusions.
Key academic technique demonstrated
The paper demonstrates how to use a structured analytical framework (SWOT) to organize industry-level research into a coherent strategic argument. Each section builds logically toward the final recommendation, showing how internal factors (strengths and weaknesses) and external factors (opportunities and threats) together inform strategic decision-making.
Structure breakdown
The paper opens with a brief contextual introduction establishing market conditions, then works through each SWOT quadrant in order. The final section, strategic alternatives, functions as a conclusion by synthesizing the prior analysis into a forward-looking recommendation for industry diversification. The structure is tightly aligned with the SWOT framework convention used in business strategy courses.
Introduction: Industry Volatility in 2018
The problem which the oil and gas industry is currently experiencing is similar to the issues confronting most industries today: volatility. The year 2018 has been one of the most economically volatile years on record. At present, oil prices are rising, although they are considerably lower than their record highs of 2011. Oil and gas companies must find ways to continue to exploit current price trends while hedging their risks.
Strengths
The great strength of the industry is that much of the world remains dependent upon oil. Recent oil prices are expected to remain in place in the short term, but over the next ten years they are predicted to rise (Biscardini et al., 2017). The world continues to industrialize at a rapid pace, likewise driving the level of demand.
Weaknesses
However, most oil companies remain historically very expensive to operate, both in terms of supply chain delivery and petroleum processing; cost containment has historically proven difficult (Biscardini et al., 2017). The industry is a global one, and while this means that hedging risks may be possible by focusing on high demand in areas of the world where demand is sinking elsewhere, it also makes the industry very vulnerable to political instability.
Opportunities
New business models are evolving in the industry. Once largely dominated by a handful of large firms, the sector is now seeing smaller, specialized firms begin to capture a larger market share. Additionally, oil and gas companies have adopted more sustainable approaches to their work. For example, France's Total has "taken this step by implementing a plan that requires one-fifth of its asset base to be focused on low-carbon technologies and by acquiring a battery manufacturer to spearhead its efforts in electricity storage," while China's Dong Energy, "originally an oil and gas producer, is shifting its focus to renewable energy, using its legacy fossil fuel businesses to generate cash flow for the development of offshore wind farms" (Biscardini et al., 2017, par. 20).
References
Biscardini, G., Morrison, R., Branson, D., & Del Maestro, A. (2017). 2017 oil and gas trends. Strategy&. Retrieved from https://www.strategyand.pwc.com/trend/2017-oil-and-gas-trends
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