The Pivotal Role of the Energy Industry in the Global Economy

Energy Industry
Student’s Name
Institution
Course Number and Name
Instructor’s Name
Due Date
Energy Industry
The energy sector can be best described as the categorization of the companies whose main operations are the production and supply of energy to the consumers. The Global Industry Classification Standard (GICS), a protocol for categorizing industries and industry players, incorporated oil and gas exploration, including those offering the supply of oil and gas equipment, in the energy industry. The energy sector and the companies that play a part in it greatly influence the global economy and even some local economies. Some countries depend majorly on the export of energy products, including oil and gas. According to the World Economic Forum, in 2016, the export of oil and gas amounted to over 90 percent of the total export of several countries: Algeria, Azerbaijan, Brunei Darussalam, Iraq, Kuwait, Libya, Sudan, and Venezuela (Hutt, 2016). The lucrative nature of the energy industry has attracted massive investments from the public and private sectors across the globe and has led to the emergence of energy companies operating on a global scale.
The United States has positioned itself as the leader in the energy industry sector for both the renewable and non-renewable energy domains. The transmission and distribution of energy across the U.S. are reliant on complex infrastructure laid down by some of the most sophisticated energy companies with new technologies integrated into the grid system. The U.S. also positions itself as the world’s-leading consumer market, courtesy of the competitive workforce and the complex supply chain that attracted over $380 billion in total investment as of the year 2018 and over $178 billion on foreign direct investment (SelectUSA.gov, n.d.). The European energy sector has also witnessed massive investments by the leading industry players, focusing on renewable energy. The leading European energy companies have pledged to invest up to 1 trillion Euros as of 2030 (Nijhuis, 2021). The massive investment in the industry among the leading economies signifies how critical the sector is to the world economy, and this has led to the emergence of some leading global companies.
Energy sector companies often consist of interrelated companies, offering services in both the renewable and non-renewable energy domain areas. These companies can further be broken down into the equipment and service industry and oil and gas industry corporations that play varying upstream, midstream, and downstream roles in the supply chain. Sinopec, a Chinese energy firm, was ranked the leading energy company globally, with revenues exceeding $324 billion in the year 2020 (Sönnichsen, 2021). This was followed by its Chinese counterpart PetroChina, with a revenue of $298 billion, and in the third position was Saudi Aramco, with revenue of...