The Oil & Petroleum industry plays an important role in the economy of a country and it helps to run the transport on the roads and working of the factories and mills. This industry gives the opportunity of investment and the investors can get good income from this business. If the proper PESTEL analysis is done for this industry about any country or specific area, then the executives of a company can understand the nature of the working, the conditions of business and necessary regulations, which they have to follow during their process of working. They need to understand that the energy resources are important for human and industrial consumers and they need to meet their demands effectively in different ways (Academic Sample Papers, 2015).

Political Factors

The industry of oil and petroleum needs labor to work with and they have to pay the taxes and other charges, which are levied over it. The industry have to follow the taxation policy, implement labor laws in industry, trade restrictions, political stability in the country, environmental laws and tariffs. The government provides the goods and services to this industry and helps it to flourish so that it can contribute in strong economy of the country. As millions of people are associated with this business, so they need to enforce proper labor law with suitable working hour and the wages policy to enhance happiness and well-being of the labor. In also enforces the industry for the provision of health, education facilities along with infrastructure to the community (Shikhar Verma, 2011).
The various political factors, which are expressed, they show the political impact on the industry and business and they refer to the government policies, which are made about energy sector and show intervention in economy of the country. Government provides products and services and decision of government can affect this industrial sector and also enhance the quality of the infrastructure (Academic Sample Papers, 2015).

Economical factors

The searching of petroleum has left great impact on the economies of the countries, where it is found and refined. The OPEC countries have earned lot of wealth through the sale of oil and petroleum to other countries as it is necessary for different domestic and commercial use. Petroleum is extracted from its reserves present in the ground and it is refined for use in the end products. The petroleum industry consists of exploration of oil and upstream in the production industry and the downstream refinery industry (Shikhar Verma, 2011). 

The economic factors have the influence of the supply and demand of the oil prices along with supplementary goods, substitute resources and the exchange rate of American dollar in the market. The consumption of petrol in the petrochemical industry, which shows the total oil demand of about 10% and this industry manufactures different products like synthetic rubber, detergents, plastics, paints, insecticides, pharmaceuticals, aerosols, adhesives, synthetic fiber and many more (UKessays, 2015).

Social Factors

The social factor in the oil & petroleum industry shows the demography, income migration, religion, culture, and ideological views on the issues. The skilled and professional workers work in this sector and they get good wages and the relaxing working hours. The countries want to have oil and gas industry, so that they can meet their future demands and it can help them to raise their living standards (Academic Sample Papers, 2015).

The petroleum industry brought changes in the lives of the people. There is no culture, which is against the exploration of petroleum and people like the oil industry as it is necessary for their development and welfare. Some people think that it is great source of pollution, which is affecting the environment but they cannot deny the importance of this industry. They think that government should impose ban on creation of pollution and start law for pollution reduction (UKessays, 2015). 

Technological Factors

When we discuss about the technological factor, it means these are about different technologies, techniques and the ways than can affect the activities, which are being undertaken in an organization. It can also influence the organization with the need to get modern technology, learn new techniques and use different methods. Such latest technologies are used for the exploration of oil and gas and use roads, pipelines, transport and oil tanks. The second technologies are used in giving protection to environment, workers, and enhance the efficiency of management with the use of new software and hardware and make better their maintaining and repairing skills (UKessays, 2015).

This industry is working for the complementary products, like ships, vehicles, airplanes, petrochemicals including synthetic rubber, synthetic fibers, and various other products. Now the substitute industries are introduced like biomass industry, nuclear industry, natural gas, coal industry, renewable energy resources and nuclear industry. With the development of other energy resources, the use of oil and petroleum are now abandoned (UKessays, 2015).

Environmental Factors

The geographic position of the oil reserves and refinery has great influence on the activity of the oil companies. The latest report of OPEC shows that most of the natural oil and petroleum is produced in the countries like Saudi Arabia, Kuwait, Libya, Russia, US, Venezuela, Iran, Canada, UAE, Nigeria, China, Qatar, Algeria, Mexico and many more and they have to face the natural disasters of earthquakes, sand storms, hurricanes, cyclones, snow storm, tsunami, hot temperature and volcanic eruption and such incidents affected the economic situation in the country (UKessays, 2015).

When the investors make their investment in the oil and petroleum industry, they should understand macro-environment. It is necessary to use oil and petroleum in the industry but the use of oil and gas products remain necessary, so the government and concerned departments should ensure strict regulations for the use of oil and gas to combat with the negative effects of oil and gas industry. They should design the structure to utilize these resources in preventive and safe manner (Academic Sample Papers, 2015).

Legal Factors

In the legal factors, the formation of laws, rules and regulations of concerned department, governments and the international organizations and communities including European Union, African Union, North American Free Trade Agreement, ASEAN are included. The legal factor influences the exploration, exploitation, and the commercialization of oil products. This industry has to face some legal positions like work regulation, work protection, social protection, competition regulation, pollution, international trade and consumer protection. The industry has to pay the subsidies, taxes for fuels and oil prices (UKessays, 2015).  


Shikhar Verma (2011), Business Environment, PESTEL Analysis of Oil & Petroleum Industry, available at

Academic Sample Papers (2015), PESTEL Analysis for Oil and Gas Industry, available at

UKessays, (2015), PESTEL Analysis on Petroleum Industry Economics Essay, available at

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