The global oil industry is arguably one of the largest in terms of revenue and relevance

The global oil industry is arguably one of the largest in terms of revenue and relevance. The road it has taken to that point has been long and tumultuous with challenges that have come to define the modern world. With energy being a crucial element to the stability of nations, oil is necessarily a product that is at the centre of numerous debates and as such its price is significantly affected by external economic and political factors. Businesses operating in the industry have to adjust to a swiftly changing operating environment (Lojanica, 2015; Husain et al., 2015). One such instance is currently underway and shows no signs of stopping. In the first half of 2014, oil had been trading at over $100 a barrel for about two years. By the end of the year, the prices had begun declining significantly. In the first quarter of the following year, they had fallen over 50% trading at $45 to $47 per barrel from highs of $112 (Baffes et al., 2015). The market hit a low of under $38 at the beginning of 2016 and started rising again, but they are yet to return to their previous highs. Currently, the market is oscillating between $60 and $80 which still means that it is yet to regain over 30% of its previous peak price. In addition to this, the companies have been facing a much stiffer operating environment even before the prices began to fall. The significant profit margins that the majors enjoyed from the high oil prices largely cushioned them from the effects of these external factors (England, Bean & Mittal, 2015). For instance, the entry into the market of new players such as independent oil producers and the wave of oil nationalization that has travelled around the globe has been putting pressure on the Big Six. However, now that the prices are not so advantageous to them anymore, the pressure is being felt much more than before. In such a business climate, it is evident that international oil companies have had to adjust since their business models are affecting their revenues.