How the Oil & Gas Industry Is Responding to Top Supply Chain Challenges

The oil and gas industry is well-versed in managing complex global supply chain dynamics. Each phase of a project, from upstream to downstream, presents unique challenges and considerations. In the past year, the industry has faced a cascade of disruptions-from geopolitical instability to labor shortages and volatile freight markets.

It's clear that external pressures are compounding the complexities faced by the energy sector-requiring innovative responses and fresh thinking at every turn, without compromising safety. Discussions with industry leaders at our recent Oil & Gas Summit in Texas highlighted emerging strategies and shared insights that illuminate the path forward. Below are some of the most compelling perspectives that surfaced throughout these peer conversations:

Navigating disruption: Political turbulence and material scarcity

From the war in Ukraine and conflicts across the Middle East, including the ongoing Red Sea crisis, which was a main shipping lane by the oil and gas industry, geopolitical events have reshaped global trade routes and introduced new layers of risk. Tariffs on critical materials like steel, aluminum, and copper have further strained supply chains, particularly for infrastructure components such as transformers and refinery parts.

In response, oil and gas companies are doubling down on cost control within their sphere of influence. This includes:

• Cloud technology adoption to streamline operations and reduce overhead
• Outsourcing non-core functions like warehousing and transportation to specialized providers
• AI-driven analytics to enhance sourcing decisions and improve forecasting accuracy

Labor challenges: Quality over quantity

The talent pool remains tight, especially in regions with specialized operational needs. Companies are prioritizing quality over quantity, seeking skilled labor in strategic geographies. This shift has prompted a reevaluation of workforce development strategies including increased safety standards and an investment in automation and smart technologies.

To bridge the gap, companies are increasingly working with partners who provide specialized logistics expertise and AI-driven tools. These resources can serve as a force multiplier, streamlining supply chain operations and freeing energy companies to dedicate their most skilled people to core activities such as exploration, production, and fining.

Freight strategy: From fragmentation to flexibility

Post-COVID, the energy industry saw fragmented decision-making around freight, leading to inefficiencies and cost overruns. Today, the focus is on unifying transportation strategies and embracing flexibility. While freight rates have stabilized, regional equipment availability remains a challenge.

Key trends include:

• Shorter disruption cycles-now averaging 3-5 years instead of 7 years
• Proactive planning for refinery maintenance and outages, which often trigger last-minute shipments and rate spikes
• Flexible multimodal transport solutions-including flatbed, truckload, rail, and barge-paired with Managed Solutions to navigate capacity and carrier constraints and ensure continuity

KPIs that matter: From the c-suite to the field

Performance metrics are no longer just operational-they're strategic. Full visibility into key performance indicators (KPIs) is now essential, not a nice-to-have, as C-suite leaders increasingly focus on:

• Transit time vs. cost trade-offs
• Cost per ton-mile
• Long-haul vs. short-haul efficiency
• Process improvements rooted in post-COVID learnings

These KPIs are guiding decisions on route optimization and investment in digital tools, while also providing the insights necessary to reduce risk and reinforce safer operations across every link of the supply chain.

Looking ahead: Resilience through innovation

As we highlighted at our recent Oil & Gas Summit, the industry is embracing a future defined by:

• Capital discipline and customer-centricity
• Smart grid technologies, automation, and AI adoption to offset tariff impacts and improve efficiency
• End-to-end energy logistics solutions that support upstream, midstream, and downstream operations

But technology alone isn't enough. Many companies are leaning into strategic partnerships with providers who can not only deliver executional excellence but also help them reimagine supply chain strategy and broader business priorities.

Our team of energy logistics experts are here to help translate these strategies into action across every stage of the supply chain. In a world of constant change, the oil and gas sector is proving that resilience isn't just about weathering storms-it's about building smarter, safer, and more agile supply chains.