Charting the oil price per barrel is a key metric on the global economy and overall peace and stability in the world. Starting from a ceiling level of $147 per barrel in 2010, today’s current level at $80 indicates there is no real fear factor in the market of an oil slowdown. This is the real weapon for ISIS and it is failing for the world to see. A secondary reason for the reduction and stability of the oil price per barrel is the increase in the supply chain. The inclusion of U.S. shale oil deposits equaling or exceeding Saudi Arabia’s deposits, the price for oil can only lower unless for the fear factor. With U.S. producing 10% of the world’s oil demand and China starting their shale program, the market is becoming more difficult to generate profits. Along with military defeats in Iraq against the oil refineries, ISIS is finding its targeted strategy of altering oil supply by military conflict hard to implement. Thus, in the past, a movement such as ISIS would have disrupted the oil supply and caused for a price increase with an added fear factor premium. It seems that the invisible hard of the economy is at work along with a successful military campaign to stop the aggressors.

LEAN SIX SIGMA TEACHING POINT: The disruptor in the Oil and Gas industry is now shale producing technology. By accessing in the past unavailable supply, the options for the customers allow for new entrants and increased competition in the global oil production market. The will bring the voice of the customer now into the marketplace decision since the customer now has options. For the current market share leader, the Saudi Arabian oil producers must rethink their alliances and look into the future of oil production and demand. The current customer footprint has changed and will not return. This is what happens when technology and game changing productivity is introduced into the market. One way to combat the trend is to accept it and adopt it the new technology. Another is to optimize your processes by becoming the most efficient and low cost provider of the commodity. This is a Lean Six Sigma approach. Depending where your organization is on the maturity scales for technology and change management, one or both tactics can assist the Saudi Arabian oil producers in maintaining their market share leader position.

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Gary Kapanowski – Lean Six Sigma Master Black Belt – Excelsior

The following blog is the opinion of Gary Kapanowski and It is the sole intent to broadcast this opinion from Gary Kapanowski and exclusively and not to reflect on any other institutions or organizations associated with Gary Kapanowski or

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