Crude Oil Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The demand and production levels set by OPEC nations are important factors in analyzing rate benchmarking in the crude oil category. The spot price of crude oil has been volatile in recent years, with significant swings up and down. The highest price was in July 2022, when it reached USD 105.08 per barrel. The lowest price was in April 2020, when it reached USD 21.04 per barrel. The data shows that the price of crude oil has been on a downward trend since 2014. In Canada, average price per barrel of crude oil in 2022 was USD 118.46 compared to USD 80.21 per barrel in 2021. In Russia, prices of crude oil in January 2022 were at USD 85.19 per barrel up from USD 54.73 per barrel in January 2021. However, due to sanctions imposed on Russia following its invasion of Ukraine in February 2022, prices of Russian crude oil dropped from USD 91.85 at the beginning of the war to USD 56.10 in February 2023.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, engineers at PetroChina Co. Ltd., and Shell PLC receive a 4% - 6% higher average salary compared to the salary received by engineers working in companies such as Saudi Arabian Oil Co., and BP PLC. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the crude oil category over the last two years:

In July 2023, ExxonMobil Corporation has announced the acquisition of Denbury Inc., an established provider of carbon capture, use, and storage (CCS) technologies and enhanced oil recovery. The transaction includes Gulf Coast and Rocky Mountain oil and natural gas activities, in addition to Denbury's carbon capture and storage facilities.

In June 2023, Engineering, Procurement, and Construction (EPC) contracts have been given by Aramco and TotalEnergies toHyundai Engineering & Construction Co. Ltd, Maire Technimont and others for the USD 11 billion "Amiral" complex, an expected large-scale petrochemicals plant extension at the SATORP refinery in the Kingdom of Saudi Arabia.

In May 2023, Chevron Corporation signed an agreement with PDC Energy, Inc. to purchase all of PDC's outstanding shares in an all-stock deal valued at USD 6.3 billion. Chevron now has assets of high quality that are expected to produce higher returns in lower-carbon-intensity regions in the United States as a result of its acquisition of PDC.

In April 2023, Shell U.K. Ltd., a subsidiary of Shell plc, finished the resumption of operations at the Pierce field in the UK Central North Sea, after a large upgrade that allowed gas to be produced after the field previously generated only oil for many years.

In September 2022, BP announced the acquisition of EDF Energy Services, which would increase BP's footprint in the US commercial and industrial (C&I) retail power and gas industry. This also opens up new prospects for better lower-carbon comprehensive energy offerings for C&I customers, as well as integration with other BP enterprises and capabilities that can help with decarbonization efforts.