Petroplex News

Big Spring, an oil-drilling community in Texas, may soon see a decline in drilling operations due to international decisions in Russia and Saudi Arabia. 

According to Texas Observer, Big Spring, located in Howard County, is a community that relies heavily on its oilfield workers, for everything from truck drivers to mechanics. Despite the annual economic output of $4.5 billion, however, an unstable oil market might cause the community to suffer.

Russia, which is the third-largest producer of oil in the world, left an agreement with Saudi Arabia to reduce global oil production, which would cause prices to rise. In response to Russia’s action, however, Saudi Arabia reduced their export prices, causing oil prices to take a steep nosedive.

Prior to Saudi Arabia’s action, the price of a gallon was $60. Now, the price per gallon is $35. 

The low prices might be a pleasant surprise for consumers, but for those who make their livelihood from the oil industry, it is another story. 

“In the long term, if the price doesn’t improve, we’ll see significant declines in the rig count, in the number of wells completed,” Artem Abramov, head of shale research at Rystad Energy, told the Texas Observer. 

Howard County Judge Kathryn Wiseman voiced her concern over the changes in the local industry. 

“We’re an oil town,” Wiseman said. “The workers spend a lot of money in Howard County.”

While the crisis is concerning, it is not a new occurrence. Big Spring was in a similar situation when another major oil bust took place. In 2016, the barrel price for crude oil fell to $36, causing a good deal of stress for the local industry. Despite the less-than-ideal conditions, however, the Texas oil communities carried on and eventually the market evened out. 

Experts believe that the industry will decrease by nearly 50% in the next few years from 1 million barrels a day to 650,000, due in part to operations in the Permian Basin slowing.