- Use of Financial Derivatives: Financial derivatives such as futures
contracts, options, and swaps allow companies to lock in oil prices for the
future and prevent sudden fluctuations. These tools help companies
manage risks associated with oil price changes. For example, a company
can stabilize the oil price for a specific period in the future by purchasing oil
futures contracts, thus avoiding sudden price increases. Additionally,
options allow companies to buy or sell oil at a specified price if needed. - Diversification of Supply Sources: Diversifying oil and gas supply
sources is a key strategy to reduce risks associated with price fluctuations.
Companies can reduce their dependence on a single source by importing
oil and gas from various countries and using alternative sources such as
liquefied natural gas (LNG). This strategy helps companies use other
sources in case of supply issues from a particular source and prevent
disruptions in the supply chain. - Improving Efficiency and Reducing Costs: Improving operational
efficiency and reducing costs can help companies mitigate the impact of oil
price fluctuations. Using modern technologies such as the Internet of
Things (IoT), artificial intelligence (AI), and blockchain can enhance
efficiency and reduce costs. For example, IoT can help companies improve
the performance of their equipment and machinery and prevent sudden
breakdowns. Additionally, AI can assist companies in data analysis and
market trend forecasting. - Long-term Contracts: Signing long-term contracts with suppliers and
customers can help companies ensure revenue and cost stability against
oil price fluctuations. These contracts may include terms related to fuel
price determination, allowing companies to stabilize the oil price for a
specific period. For example, a company can stabilize the oil price for
several years by signing a long-term contract with an oil supplier, thus
avoiding sudden price increases. - Financial Management and Investment: Companies should have
appropriate financial management strategies to withstand oil price
fluctuations. This includes using financial derivatives to hedge against oil
price risks and managing financial resources to maintain sufficient liquidity.
For example, companies can manage risks associated with oil price
fluctuations and avoid sudden price increases by using futures and options
contracts. Additionally, managing financial resources helps companies
maintain sufficient liquidity to continue their operations in case of financial
difficulties.
- Continuous Market Monitoring: Companies should continuously monitor
the oil and gas market and stay informed about market trends and price
changes. This information can aid in strategic decision-making and risk
management. For example, companies can adopt appropriate strategies for
managing risks associated with oil price fluctuations by analyzing market
data and forecasting future trends. Continuous market monitoring also
helps companies stay aware of sudden market changes and respond
promptly.
These strategies can help companies mitigate risks associated with oil
price fluctuations while improving their performance and financial stability.
