The US oil and gas labor market is amongst the world’s most severely hit by the downturn that the Covid-19 pandemic has brought, a Rystad Energy analysis of the latest data from the US Bureau of Labor Statistics (US BLS) reveals. More than 100,000 oil and gas jobs have already been lost in total, with most of them coming from the support activities market. The data shows that the four oil and gas segments most affected are support activities for oil and gas operations (44,550 jobs cut from a pre-Covid-19 level of 233,550), pipeline and gas and related construction (16,000 jobs cut from 227,000), drilling of oil and gas wells (13,450 jobs cut from 79,450) and oil and gas extraction (9,600 jobs cut from 156,600).
In addition to the above four segments from the US BLS, Rystad Energy has included more components of the oil and gas industry chain, thus independently estimating the total job cuts to exceed 100,000 to date. The support activities segment in particular reveals a staggering employment slump of 20% compared to February’s pre-Covid-19 levels.
“The job cuts can be attributed mainly to the nosediving oil prices driven by a sharp contraction in domestic oil demand, which has resulted in an unprecedented demand-supply imbalance. In response to the weakened demand, operators and service providers alike have been frantically cutting jobs,“ says Rystad Energy’s Vice President Energy Service Research Matthew Fitzsimmons.
Heavy construction labor demand in the US increased by 3.4% in May, but the oil and gas industry did not contribute to this increase. Since the outbreak of the pandemic in the US in early February, oil and gas construction jobs have decreased by more than 10%. We believe this sector within the oil and gas industry will take a more cautious approach to new construction activity, waiting for the safety risks associated with Covid-19 to recede. Read more