--- title: "Barrel Up: Oilfield Digitization Comes of Age" description: This article discusses the rise of Digitization in the Oil and Gas industry, especially given the rising price of Oil. image: https://download.riverlogic.com/hubfs/Oil%20and%20gas%20platform%20with%20gas%20burning%2c%20Power%20energy.%20.jpeg --- ### Get in Touch [![logo](https://download.riverlogic.com/hs-fs/hubfs/logo.png?width=3153&height=398&name=logo.png "logo")](http://riverlogic.com) [![logo-hover](https://download.riverlogic.com/hs-fs/hubfs/logo-hover.png?width=3153&height=398&name=logo-hover.png "logo-hover")](http://riverlogic.com) - [Solutions](http://www.riverlogic.com/solutions) - [Capacity Planning](https://download.riverlogic.com/solutions/capacity-planning) - [Commodity Trading & Logistics](https://download.riverlogic.com/solutions/commodity-trading-and-logistics-optimization) - [Product Mix & Customer Profitability](https://download.riverlogic.com/solutions/product-mix-customer-profitability) - [Production Planning](https://download.riverlogic.com/solutions/production-planning-and-scheduling) - [Sales & Operations Planning](https://download.riverlogic.com/solutions/sales-and-operations-planning) - [Sourcing & Procurement](https://download.riverlogic.com/solutions/sourcing-and-procurement-optimization) - [Supply Chain & Logistics Optimization](https://download.riverlogic.com/solutions/supply-chain-optimization) - [Supply Chain Network Optimization](https://download.riverlogic.com/solutions/supply-chain-network-optimization) - [Trade Promotion Optimization](https://download.riverlogic.com/solutions/trade-promotion-optimization) - [Industries](https://download.riverlogic.com/industries) - [Building Products](https://download.riverlogic.com/industries/building-products) - [Chemicals](https://download.riverlogic.com/industries/chemicals) - [Consumer Packaged Goods](https://download.riverlogic.com/industries/consumer-packaged-goods) - [Food and Beverage](https://download.riverlogic.com/industries/food-beverage) - [Manufacturing](https://download.riverlogic.com/industries/manufacturing) - [Mining & Metals](https://download.riverlogic.com/industries/mining-and-metals) - [Oil & Gas](https://download.riverlogic.com/industries/oil-and-gas) - [Pharmaceuticals](https://download.riverlogic.com/industries/pharmaceuticals) - [Pulp & Paper](https://download.riverlogic.com/industries/pulp-and-paper) - [Utilities](https://download.riverlogic.com/industries/utilities) - [Technology](https://download.riverlogic.com/technology/prescriptive-analytics-platform) - [Our Platform](https://download.riverlogic.com/technology/prescriptive-analytics-platform) - [Prescriptive Analytics](https://download.riverlogic.com/technology/prescriptive-analytics) - [Resources](https://download.riverlogic.com/resources) - [Blog](https://download.riverlogic.com/blog) - [News](https://download.riverlogic.com/news-2) - [Testimonials](https://download.riverlogic.com/testimonials) - [Partners](https://download.riverlogic.com/partner-program) - [Our Partners](https://download.riverlogic.com/our-partners) - [About Us](https://download.riverlogic.com/about-us) - [Contact Us](https://download.riverlogic.com/contact-us) - [Our Board](https://download.riverlogic.com/board-of-directors) - [Our Leadership](https://download.riverlogic.com/leadership) - [Careers](https://download.riverlogic.com/careers-current) - Get in Touch Get in Touch [![Get in Touch](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/484375/8a2efec4-88ad-40a3-bc49-91f4a5e57e38.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/484375/8a2efec4-88ad-40a3-bc49-91f4a5e57e38) Share This [mailto:?subject=Barrel%20Up:%20Oilfield%20Digitization%20Comes%20of%20Age&body=https%3A%2F%2Fdownload.riverlogic.com%2Fblog%2Fbarrel-up-oilfield-digitization-comes-of-age](mailto:?subject=Barrel%20Up:%20Oilfield%20Digitization%20Comes%20of%20Age&body=https%3A%2F%2Fdownload.riverlogic.com%2Fblog%2Fbarrel-up-oilfield-digitization-comes-of-age) # Barrel Up: Oilfield Digitization Comes of Age A company making a widget that sells for $50 but in a matter of months gains demand, allowing the price to be bumped up to $70, would sound like a great thing. Right? If only it were that simple in the Energy industry. The barrel price of Brent crude — the thermometer of industry health — has made a comeback that has many stakeholders more skeptical than elated. Why? Unlike other industries, Energy turns on an axis of its own as we [covered earlier](https://blog.riverlogic.com/transparency-in-trading-margin-erosion-or-profit-opportunity). However, what makes this time different is that the uptick, for most U.S. firms, comes from a position of offense as a leading exporter rather than playing defense because of foreign oil actions. The equation has changed.    As a voice of reasonable caution, here’s a quick view of concerns as oil prices increase:  - At a micro level, oil prices impact gasoline prices, which often means tighter household budgets to spend on other goods and services. - At a macro level, inflation concerns arise with businesses passing along higher production and transportation costs to customers. - Economic spending slows. **Investors Weigh In, Too. ** It’s not only experts who have a voice in the barrel price moving upward. Investors have been vocal about keeping spending costs down and directing excess cash back to shareholders. This mandate may come from global observations. This year, despite higher earnings, Supermajors in France and Norway beat earnings expectations, only to fall short with reduced margins in refinery operations and profit misses.    The message to U.S. majors can be summed up by one Shell investor’s blunt [statement](https://www.wsj.com/articles/shell-profit-soars-on-oil-recovery-1524724946?mod=searchresults&page=1&pos=10). He talks about the rising barrel prices and how industry’s leadership needs to “show that they’re not going to start spending willy-nilly again.”   **Digitization to the Rescue** Before the U.S. began moving from a net importer to an on-track leading exporter, oil companies already started the process of digitizing the oilfield. From virtual drilling to setting up shop in Silicon Valley for high-performance computing, the digital revolution for the industry is underway. A few of these instances include IoT devices to measure and track assets that also integrate with machine-learning algorithms for automated predictive maintenance. Or, advanced analytics and optimization — technologies that cover upstream, midstream, and downstream scenarios with thousands, if not millions, of possibilities. This allows business units the flexibility to adjust as rapidly as the geopolitical climate changes. Technologies like these range in scope, from extending the lifetime value of equipment to big-picture financial outcomes that eliminate margin loss and maximize profitability across the ecosystem.  As for the forecast that oil’s upswing is at the expense of the macroeconomy, that’s based on decades-old thinking from 1953, the last time the U.S. was an energy exporter. “In the past, any time oil prices have gone up it was as a result of supply constraints and the U.S. was at the mercy of foreign oil,” said [Joseph Tanious, senior investment strategist at Bessemer Trust](https://www.wsj.com/articles/oil-is-fast-approaching-70-is-the-economy-ready-for-it-1524394800). “But U.S. oil production has picked up in a meaningful way—there could be also some benefits to having modestly rising oil prices.”  Can the price of a barrel with its fluctuating nature ever be as simple as calculating the price of a widget? With steady oil price increases, more worldwide demand, and an encroaching position as a net exporter, U.S. oil companies tapping into the digital revolution may find it feasible. You May Also Enjoy Reading [How to Start Using Prescriptive Analytics: Your 12-Step Guide](https://download.riverlogic.com/blog/how-to-start-using-prescriptive-analytics-your-12-step-guide)…[(Read More)](https://download.riverlogic.com/blog/how-to-start-using-prescriptive-analytics-your-12-step-guide) [6 Supply Chain Analytics Examples to Keep You Competitive](https://download.riverlogic.com/blog/6-supply-chain-analytics-examples-to-keep-you-competitive)…[(Read More)](https://download.riverlogic.com/blog/6-supply-chain-analytics-examples-to-keep-you-competitive) #### About River Logic We’re on a mission to ensure companies across the globe drive maximum value with every decision they make, no matter how complex. 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