Experts said that because oil prices are now stagnant, it’s not clear when the jobs may return, Alaska Public Media reported last week.
The demand for oil plummeted in the spring as the virus shut down cities. That was coupled with a price war leading to a surplus of oil on the global market. A key benchmark for oil prices then fell into negative territory for the first time.
Labour department data show there were an estimated 6,900 jobs in Alaska's oil and gas industry in September, down from 10,000 in January. Job numbers haven't been so low in more than 30 years, Alaska Public Media reported.
Kara Moriarty, Alaska Oil and Gas Association president and CEO, called the pandemic and the oil price war a “double whammy.”
“You saw companies, for safety reasons, get people off the slope, cut back, quit doing a lot of activity,'' Moriarty said. “So that meant a loss of contractor and direct jobs.''
The job losses are affecting other areas of the economy, including industries that work with oil companies and rely on money that employees spend on goods and services, said Mouhcine Guettabi, an economist at the University of Alaska Anchorage Institute of Social and Economic Research.
While predictions are difficult, a significant increase in oil revenue and jobs is not expected soon.
“Unless oil prices get back to some very, very high level, I don't see anything on the horizon that thousands ... of jobs are going to get created in Alaska over the next year or two years,'' Guettabi said.
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