Employment in the oil and gas sector is on the road to recovery in the United States after the significant job cuts that took place during the time of the pandemic. But a full recovery will not be seen for another five years, new analysis from Rystad Energy showed on Wednesday.
The US oil and gas industry has lost 200,000 jobs during the pandemic, according to Rystad’s calculations. This represented 20% of the sector’s total workforce. In 2020 alone, 100,000 oil and gas jobs were lost in the United States, mostly in the drilling tools and services segment.
Today, as demand for oil and gas has picked up – and oil and gas prices with it – more than half of those jobs have since been created. But the rest of the recovery is expected to be slower, based on Rystad Energy’s oil price scenario where WTI averages $106 this year, $70 a barrel next year and $50 a barrel in 2025.
This year, employment in the oil and gas sector in the United States is expected to increase by 12.5%, Rystad said, ending the year with 971,000 O&G jobs. By 2027, this figure is expected to reach 1.09 million, up from 1.07 million before Covid.
Rystad also noted that while the number of jobs is expected to increase by 12.5% this year, wages are only expected to rise by 2.9% this year as inflation hits oil and gas company results.
By 2024, however, this wage growth is expected to increase by 10%.
Fueled by rapidly rising oil prices amid a better-than-expected demand recovery and supply constraints caused by Russia’s invasion of Ukraine, the U.S. labor market appears poised to recover. ‘benefit from it and continue its growth trajectory,’ Sumit Yadav, an analyst at Rystad Energy, said in Wednesday’s press release.
By Julianne Geiger for Oilprice.com
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