Steel Pipes for Drilling Oil Are the New Semiconductors
A strategically important bottleneck is emerging.
A steel pipe is externally welded in a machine at the Chelyabinsk Pipe Rolling Plant PJSC, part of ChelPipe Group, in Chelyabinsk, Russia.
Photographer: Andrey Rudakov/BloombergIt’s no secret that oil rules everything right now.
Governments around the world are trying to bring down inflation, a big portion of which is rising energy costs. Meanwhile, the Federal Reserve has basically soft-pegged itself to the price of gas in America, vowing to hike rates and risk a rise in unemployment until price pressures fade.
But even with crude oil prices firmly above $100 a barrel, we’ve yet to see production expand enough to bring prices down.
So what gives? While participants in the energy industry have cited everything from unwilling investors to government regulation and a shortage of labor, supply chain issues are also said to be playing a part — with one key component recently assuming a starring role.