Political Factors
- Governments controlling world hydrocarbon reserves → significant impact - OPEC controlling 75.5% of world reserves → highly influential
- Political risks: Instability, expropriation/nationalization of property, terrorism, civil conflicts, strikes, wars, etc. → adverse effect
- Environmental treaties (Kyoto protocol) → negative impact
Economic Factors
- Interdependence between world economy and oil industry: economic growth → growing demand for oil; but also: continual supply of oil at reasonable prices → stable economy
- Inelastic demand → positive effect
- US dollar (and US economy) →significant impact
- Exchange rates → impact on buyers and suppliers
Socio-cultural Factors
- Values and beliefs shape preferences for energies → energy mix changing towards greener energies
- Need for companies to show social responsibility → supporting sustainable human development through investments in education, training, social and environmental activities
Technological Factors
- Extremely technology-driven: improved upstream technologies →better recovery of hydrocarbon, recovering oil from reserves considered exhausted → improved profitability (gains)
- Breakthrough technology in ultradeep-water extraction →competitive advantage for Petrobras
- Advanced technology → profound impact on long-term sustainability

. Industry Competition Analysis (Porter’s five forces)
In order to create a profitable competitive strategy, a firm must first examine the basic competitive structure of its industry through the competitive forces, because the potential profitability of the firm is heavily influenced by the profitability of its industry. For this purpose, corporate strategists advise the use of the Porter’s Industry Analysis framework, which describes the competitive environment in terms of five basic competitive forces.
Based on Porter’s framework, for instance,