Petroleum Supply Chain

A Petroleum industry plays an important role in global economic development, providing all the energy for transportation of the majority of the types of automobiles in the industry. It also provides solutions in the form of thermal energy such as heating to residential structures. Petroleum is a necessity and a requirement for many businesses and modern economies depend too much upon the goods and services that contain Petroleum and its outcomes

Day by day new technology is been discovered and in this extraction and refining field also scientists are constantly working on invention of new machineries so that oil refining can be much more cheaper than earlier

Petroleum or the oil and gas industry is a multi billion dollar industry. It also holds its pride of position among the richest and monetarily valuable industry. All this has led to severe competition among the nations of the world. All over the globe the major aim is to stimulate production of oil.

* oil companies, which are engaged in the production of PETROLEUM and PETROLEUM products; and

* Companies, which supply the oil industry with its requirements such as machines, tools, equipments, etc.

The Supply Chain

Through supply chain any country can increase its production, improve its efficiency and take advantage with competitors.

The Supply chain management in the oil and gas or the petroleum industry is plagued with many different and various challenges. These challenges are influence on the cost of oil and its products, which arises from the production capabilities of crude oil suppliers, long transportation lead times and limitations of modes of transportation. Logistic is a major challenge in supply chain.

But it has a huge opportunity in this sector, because no any specific method has been adopted to determine when companies should attempt to take a decision.

More efficient and cost effective supply chain practices in petroleum industry represent important factors for maintain continuous supplies of crude oil.

The hardest and the most difficult part of the Petroleum Supply Chain management is to effectively manage the down stream part of the supply chain. The only way to get profits and succeed in business is to optimize the value of the hydrocarbons.

Crude products or the raw materials are all by nature substitutable, but the assets used in the other procedures like manufacture, storage and transport of raw materials, inventory are all inflexible. The prices of the Petroleum industry are very volatile and subject to sudden changes and not very easily predictable

Leave a Comment

qspray said:

Yeah, it is very true that modern industry and economics are so dependent on petroleum products. Any variation in the petroleum product values will affect severely on the economics of a country these days. It has lead to a situation where petroleum supply chain should be uninterrupted.

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