Skip to Main Content

How Do Global Markets Affect Offshore Workers’ Safety in the Gulf of Mexico?

Oil prices are continuing to fall. On August 13, oil reached a new six-and-a-half year low when it slipped to $41.35 per barrel. While some experts are predicting that the plunge in oil prices could drive Texas into a recession, others are already seeing a light at the end of the tunnel. Although, we are not there yet: Even the most optimistic forecasters are not expecting a significant rally until late 2016. Of course, many of these same experts thought the market was ready to turn when prices dropped to $60 per barrel in June of this year.

Falling Profits May Lead to Oil Companies Cutting Corners

We have previously discussed how low oil prices can lead to an increased risk of accidents and injuries for offshore workers. Simply put, drilling activity does not ebb and flow with oil prices. In other words, just because oil prices are down does not mean that production stops. Active rigs continue to drill, and oil companies will often ramp up production during down markets in anticipation of the market springing back. However, when their profits are down, the oil companies may cut corners in their operations. Unfortunately, the corners that get cut often affect workers’ safety offshore.

Progress Between U.S. and Mexico But Trouble Overseas

As oil prices continue to fall this Summer, the oil companies’ profits are sliding as well. Exxon, Chevron, Shell, and others have all reported unfavorable financial results so far in 2015 – which have resulted in drastic cuts in spending. But, these companies are still drilling offshore.

In fact, through the first half of August, the total rig count in the U.S. was up to 672, the highest number since early May. While the decision to deploy some of these new rigs was likely made when forecasters were predicting a $60 per barrel floor earlier in the year, the fact remains that oil companies are, at least for the time being, beginning to put more employees back to work. Now, two recent global developments may further impact domestic oil production in Texas and the Gulf of Mexico.

U.S. Department of Commerce Plans to Approve U.S.-Mexico Crude Oil Exchange

In a move welcomed by federal lawmakers and oil industry insiders, the U.S. Department of Commerce has indicated that it will approve a first-of-its-kind oil trading relationship between oil companies in the U.S. and Mexico. While the U.S. already has similar relationships in place with Canada and other countries, this is a significant development for domestic oil production. Given its proximity to the border, Texas may stand to benefit significantly from this new policy.

Experts expect the U.S. Department of Commerce’s approval to spur additional investment in oil production and give a boost to the struggling oil economy. Perhaps even more significantly, lawmakers see this move as a step toward further liberalization of U.S. policies on selling oil overseas.

OPEC Nations Seek to Outgun U.S. and Other Oil-Producing Countries

On the other hand, as has been recently reported, Saudi Arabia and other member-nations of the Organization of the Petroleum Exporting Countries (OPEC) are continuing to produce oil in the down market in hopes of squeezing the U.S. and other non-OPEC countries – which have higher costs of production. These higher production costs are a major part of what has led to the slow-down in domestic U.S. production, and members of the International Energy Agency (IEA) and other industry insiders expect OPEC’s actions to put an even greater strain on U.S. companies as they fight for market share in light of the current positive long-term forecasts for the price of oil.

Offshore Oil Workers at the Mercy of Big Oil Profits

When it comes to safety, offshore workers in the Gulf of Mexico are largely at the mercy of their employers. While the oil companies can, and should, make smart and cautious decisions about working conditions and the wellbeing of their workers, profits often reign supreme. With major developments like the lifting of export restrictions between the U.S. and Mexico and OPEC seeking to harm U.S. production efforts, oil companies’ profits remain in flux – which means that offshore workers’ safety may be at risk as well.

Zehl & Associates | Experienced Offshore Injury Lawyers: 1-888-603-3636

Our Offshore Injury Lawyers don’t just win — they set records.

For example, in just the past 5 years alone, we’ve won more than $1 Billion in verdicts and settlements for injured offshore workers across Texas, Louisiana and the Gulf Coast, distinguishing our law firm as one of the top Maritime Law Firms in the United States.

If you or a loved one were injured while working offshore, call our Experienced Maritime Lawyers for a Free Consultation at 1-888-603-3636 or just Click Here to send us a confidential email.