Oil & gas credit quality stagnates

The recovery in credit risk across the global industry has slowed, due to several sources of disruption

The long-promised recovery of the global oil and gas industry appears to be sputtering. When viewed from the perspective of credit analysts at the world’s largest financial institutions, the industry was showing signs of improvement throughout much of 2018 and into early 2019. But the risks on the road ahead are proving too big to ignore. The credit analysts are right to be concerned. The industry is confronted on every side—from a volatile geopolitical environment, technological changes, concerns about climate change and significant investment into renewable, cleaner sources of energy. Meanwhile, larger-than-expected supplies have consistently driven down prices and crimped earnings growth