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Introduction
The United Arab Emirates (UAE) significantly contributes to world gas and oil output. The country is vulnerable to competition from newcomers in the business; some are located on continents other than Asia. New oil fields have been found in many nations throughout the world. In 2021, the BW Energy company announced the discovery of an oil-containing reservoir in the Hibiscus Exploration well in Ghana (Energy Capital and Power, 2022). There is a risk that new competitors may steal away part of the UAE’s export markets.
Competitors in the Industry
In Asia, some nations produce significant volumes of oil and gas, thus giving UAE tough competition. The United Arab Emirates (UAE) is not even among Asia’s top three oil and gas-producing countries (Statista, 2022). China, India, and Indonesia take those spots, respectively. China produces more than half of the oil produced in Asia (Statista, 2022). Therefore, these top producers take a significant portion of the global market.
Threats of Substitute
The main threat to the oil and gas industry is electricity as an energy source. Companies such as Tesla have created cars that use electric energy (Tesla, 2022). However, it may take many years for electric cars to compete with oil-product-driven vehicles effectively. People may alternatively use electricity for cooking instead of gas. Renewable energy sources, such as the sun and wind, may be used to generate electricity.
The Bargaining Power of Buyers
The countries where UAE exports its products determine the efficiency of the oil and gas industry in the country. The UAE exports oil and gas to countries including the USA, Italy, and China (International Trade Administration, 2022). Nations such as China produce their oil and may import oil from UAE at lower prices. The high prices may force countries like the United States to find alternative product suppliers.
Conclusion
The UAE has efficient crude oil mining and processing technology. It makes it to be among the best ten oil-producing nations globally. New African entrants, such as Ghana and Ivory Coast, may not have sufficient capital to effectively dominate the oil and gas industry (Statista, 2022). Additionally, they may not have enough money to invest in modern technology to produce oil and gas in high amounts.
References
Energy Capital and Power. (2022). Ten major oil and gas discoveries in North, West, and East Africa.
International Trade Administration. (2022). United Arab Emirates; Oil and gas.
Statista. (2022). APAC: Oil production by country 2021.
Tesla. (2022). About Tesla.
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