Course Overview
This course is designed to provide oil and gas professionals, financial analysts, and policy makers with a comprehensive understanding of oil price volatility and the tools available to manage the associated risks. It explores the causes of oil price fluctuations, the impact on business performance and investment decisions, and the practical use of financial instruments and strategic approaches to mitigate exposure. Real-world case studies and simulations will help participants build actionable strategies to manage price risk in upstream, midstream, and downstream operations.
Course Objectives
Upon completing the course, participants will be able to:
- Understand the global oil market dynamics and price drivers.
- Analyze historical trends and forecast oil price movements.
- Assess the financial and operational risks posed by price volatility.
- Apply hedging strategies using derivatives (futures, options, swaps).
- Evaluate risk exposure and develop mitigation plans for projects and portfolios.
- Align price risk management with business strategy and financial planning.
Who Should Attend
- Oil & Gas Executives and Strategic Planners
- Financial Risk Managers and Analysts
- Trading and Marketing Professionals
- Project Finance and Investment Teams
- Supply Chain and Procurement Managers
- Policy Makers and Energy Economists
Course Outline
Global Oil Market Dynamics
- Overview of Crude Oil Supply Chains
- Key Benchmarks: Brent, WTI, Dubai
- Supply-Demand Fundamentals and Geopolitical Drivers
- OPEC+, Shale Revolution, and Global Energy Transitions
- Market Sentiment, Speculation, and Macro Indicators
Oil Price Volatility: Patterns and Implications
- Historical Volatility Trends and Crisis Case Studies
- Measuring Volatility: Standard Deviation, VAR, Beta
- Impacts on E&P Projects, Refining Margins, and Cash Flows
- Scenario Analysis: High vs. Low Price Environments
- Strategic Planning Under Price Uncertainty
Financial Risk Management Instruments
- Introduction to Derivatives: Forwards, Futures, Options, Swaps
- Hedging Strategies for Producers, Refiners, and Traders
- Basis Risk and Contract Customization
- Risk Metrics and Limits: Delta, Gamma, Value at Risk (VaR)
- Interactive Exercise: Simulating a Hedging Strategy
Operational and Strategic Risk Mitigation
- Budgeting with Price Bands and Stress Testing
- Use of Insurance and Contingency Planning
- Contractual Strategies: Long-Term Sales Agreements, Pricing Formulas
- Diversification of Portfolios and Markets
- Cost Control and Flexibility in Operations
Governance, Compliance, and Reporting
- Risk Governance Frameworks for Commodity Risk
- Accounting Standards for Hedge Accounting (IFRS 9, ASC 815)
- Internal Controls and Audit for Trading and Risk Units
- ESG Considerations in Risk Management
- Building a Risk Culture in Energy Organizations