Low oil prices negatively impacted the United States’ energy industry, as the current environment reflected negatively on the ability of the industry to generate revenue, according to Asia Investment’s report.
The report showed that the oil industry in the Gulf Cooperation Council’s states is flexible and dynamic unlike in the US, because while the American production is owned by private companies, Gulf governments dominate their oil industries.
Although important expenses such as capital expenditures and dividends have been reduced, cash flows of the US energy industry, which include 46 important oil companies, contracted by roughly 33 per cent per year due to the drop in income, added the report.
The report noted that reducing production costs, as in Saudi Arabia and Kuwait, in which production cost is less than $10 per barrel compared with $40 in America, explains the flexibility in Gulf oil industry.
According to the report, despite this, other regional countries are suffering from the effects of the decline in energy prices.
(US$1 = AED3.67, at the time of publishing)