The oil and gas sector will face old and new challenges, as unsettled markets will continue to impact businesses, and businesses must adapt in a rapidly decarbonizing world. Even in the midst of these challenges, however, energy and trading organizations should feel empowered to utilize the tools they need to thrive.

The following industry trends—which highlight everything from the growth of generative artificial intelligence (AI) to potential new revenue streams in the fuel retail market—do not only provide a roadmap for what energy and trading organizations can expect in 2024; they also present opportunities for development, reinvention and innovation. These insights equip organizations with valuable blueprints for growth in an uncertain year. 

Leverage retail media networks to tap into new revenue streams

Rising prices, fluctuating demand, competition from renewables: In such a volatile climate, how can energy companies design fuel retail experiences that benefit customers and organizations alike?

Retail media networks (RMNs) have emerged as a novel, powerful solution. When replenishing their gas tanks, customers spend an average of two minutes at the pump each visit. RMNs fill that time by giving customers something to watch—and, in so doing, they give companies a new potential revenue stream.

Reuters projects that by 2028 revenue from RMNs will account for 15.4 percent of all revenue from ads, eclipsing television as an advertising platform. By partnering with other organizations and offering valuable opportunities for targeted advertising, brand promotion and customer engagement, RMNs offer a pathway to build stronger relationships with customers, enhance brand loyalty and drive growth in a competitive marketplace.

Unleash the power of generative AI to unlock new value

The generative AI revolution is here to stay, and it presents an opportunity for oil and gas companies to rethink the way they do business—and for new ways of growing revenue. Goldman Sachs predicts that generative AI could increase the world’s GDP by seven percent over the next 10 years.

Unlike current forms of artificial intelligence, generative AI uses machine learning and large language models to create new content. Oil and gas companies can take advantage of this novel tool in a number of ways, including:

• Modeling and simulation: Improve accuracy and optimize reservoir extraction strategies to improve resource management, enhance operational efficiency and maximize reserves recovery
• Asset management: Analyze real-time data from sensors to predict maintenance needs, prevent equipment failures, improve safety and lengthen the lifespan of assets
• Market analysis: Leverage algorithms that generate accurate forecasts, identify trading opportunities and optimize strategies to maximize revenue and navigate market conditions with agility

Additionally, oil and gas companies can use generative AI to mitigate risk, meet safety requirements and make the most of environmental monitoring systems to satisfy evolving regulations.

Democratize access to data repositories

Thanks to the rise of generative AI, intuitive, AI-driven access to central data repositories is transforming the way the energy industry can interact with crucial information. By interrogating trade and pricing repositories, this approach enables fast, mass adoption across the user base, strategically accelerating the generation of relevant use cases.

This not only boosts the utilization of data across various sectors—such as energy production, distribution and consumption—but also optimizes the application of state-of-the-art generative AI tools within the sector. As a result, the ability to efficiently analyze data will drive productivity and foster innovation.

Grow with—not against—renewables

As the world puts net-zero plans into action, the renewables market is expected to grow exponentially. In the United States, solar energy will have expanded by 84 percent throughout the rest of 2023 and 2024. Growth is expected globally, with China, India and the European Union making their own investments in renewable energy. Similarly, 68 percent of executives across industries in the United States plan to increase their use of renewables, according to a survey by Publicis Sapient, Microsoft and Ipsos.

Where does that leave oil and gas companies? In 2024, oil and gas will continue to play a crucial role in powering the world, especially as reliable, utility-scale infrastructure is not yet in place to support the electrification revolution.

Oil and gas companies should look to the future as an opportunity to grow revenue while supporting consumers. Traders can diversify their portfolios to invest in renewable projects and unlock new revenue streams, such as biofuels. Biofuels will help energy consumers meet lower carbon goals with minimal, if any, infrastructure changes. At the same time, energy companies that invest in renewables can access government incentives.

New partnerships and collaborative projects will also empower energy organizations to help shape the transition to renewables. Renewables-focused startups can benefit from oil and gas companies’ deep industry and operational expertise, and these companies can gain a competitive advantage by becoming trusted partners to the next generation of energy leaders and leveraging their expertise in the development of carbon capture and storage technologies.

As renewables continue to claim a share of the market in 2024 and beyond, oil and gas companies have an opportunity to grow in new directions and diversify their revenue streams to build a sustainable, future-proof business model.

Utilize data-driven insights to build and bolster resilient supply chains

Though demand for oil is expected to grow in 2024, it will likely slip in the coming years. The International Energy Association (IEA) predicts that yearly demand growth for oil will slow to 0.4 md/b in 2028, down significantly from 2.4 mb/d in 2023. Yet organizations should feel empowered to buttress their supply chains to prepare for whatever 2024 has in store. What strategies can they deploy?

Technology and data analytics empower businesses with knowledge. Advanced tools and monitoring systems provide critical insights into inventories, production rates and demand patterns so companies can have real-time visibility and traceability into supply chains.

Moreover, effective risk management is a cornerstone of building resilient supply chains. By conducting risk assessments and designing sound mitigation measures, organizations can react swiftly to get around roadblocks that may arise in 2024 and beyond.

Modernize value chains to gain valuable insights

How can businesses remain competitive and drive growth in 2024? Now more than ever, value chain modernization stands out as an essential strategy.

With fluctuating prices, supply and demand, oil and gas companies need streamlined processes and integrated systems in order to make their operations more efficient. Cloud computing, Internet of Things (IoT), blockchain tools and advanced analytics can automate manual tasks, streamline data collection and analysis, manage resources, eliminate bottlenecks and enhance collaboration across the value chain. The cost savings that organizations net from increased operational efficiency means that they can invest in research and development to innovate and gain an edge in the market.

Use an ETRM ecosystem as a compass to navigate the future

Market volatility in the last several years has added complexity and uncertainty to energy and trading organizations, and the accelerating push toward net zero over the next several years will require even more consideration, planning and action. Most of all, it will require trading architectures to become nimble, agile, adaptive and less monolithic.

One of the most useful compasses that companies have in hand as they navigate any turbulence that will come in 2024 is a data-centric energy trade and risk management (ETRM) ecosystem. More than a siloed software solution, an ETRM ecosystem integrates and consolidates data to provide a holistic view of operations and equip traders as well as finance and operations teams with knowledge to make data-driven decisions with accuracy and agility. Built around a central data platform that reduces dependency on the core ETRM, such a transparent, integrated ecosystem enables success by empowering companies to respond quickly to market changes, evaluate multiple strategies and enhance operational efficiency.