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The challenges of low oil prices

The past few years have seen massive changes in oil prices. It wasn't all that long ago that oil prices were around $100 a barrel. Prices have undergone a massive drop since then. These days, oil prices are at the lowest levels they've been at in quite some time.

The low price of oil poses significant challenges for some Louisiana businesses. Companies that drill for oil are one such type of business, but they are certainly not the only one. Many businesses in the state have operations that relate to oil in some way. Examples include companies that service oil-related equipment and companies that supply parts to oil producers. Low oil prices can lead to severely reduced income streams for these kinds of businesses.

In these challenging times, many oil-related businesses are going into a sort of survival mode. They are trying to get as lean as possible in an attempt to weather the current economic conditions and stay afloat until oil prices go back to trending up. Examples of steps companies sometimes take to try to get leaner in poor economic conditions include shutting down non-essential operations and reducing staff.

When a business is in lean state in response to economic challenges, financial shocks can pose a real threat to it. Such shocks could potentially even make it so the company can no longer stay afloat. One of the things that can sometimes lead to a company facing financial shocks are business disputes, such as legal disputes with other companies or government agencies. Thus, in today's low-oil-price environment, oil-related companies can be in a very precarious situation when facing business disputes. Skilled business law attorneys can assist oil-related companies and other businesses with working to protect their wellbeing when facing business disputes.

Source: Greater Baton Rouge Business Report, "With oil prices at rock-bottom, Louisiana companies that depend on drilling are in survival mode.," David Jacobs, Feb. 16, 2016

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