Exporting is a crucial source of economic growth for oil-producing countries, and it is a promising opportunity for their economy. In most cases, developing countries that export their oil products and services overseas grow at a faster rate and they tend to do better compared to those that do not.
The governments of these countries should encourage the exportation of oil products and international trade to help improve their economy. Exporting oil is not as challenging as you may think and there various methods and strategies to help promote and increase the business level of oil export sales.
In any given economy, most geographic markets provide oil exporting countries with business opportunities to help create new revenue streams in the state. According to experts, oil-producing countries that export their products are productive and employ many people both locally and internationally.
In most cases, the process of expanding into the international oil markets can prove to be a difficult task. However, developing countries can accelerate their oil exportation through the following strategic ways.
Look Beyond the Region
Developing countries that produce oil should look beyond the regional markets. It helps them make significant gains by accessing the services of various oil companies. For example, Spectra Oil South Africa is one of the leading Oil Marketing Companies (OMC) in Zambia and have grown into one of the major B2B fuel suppliers in Zambia. Currently, many countries represent significant opportunities for most oil exporting countries given their expanding taste for the high-value oil products. Henceforth, there are many such companies in Africa to connect with for better business opportunities.
Most countries prefer to import oil products with minimal processing. They rely on their domestically available and low-cost labour as well as processing capacity before selling the products to their consumers. With the right support, oil producing countries can also process the oil before selling it within the state and beyond the region to generate increased revenue.
The governments of oil-producing countries should simplify the regulation related to oil exports since long bureaucracy and regulation procedures negatively impact oil exportation, especially for developing countries.
Also, governments should be in the position to improve their information collection strategies and dissemination about foreign countries and the requirements for exporting oil. Oil producing countries should also put into consideration product standards as well as other technical needs and requirements that are imposed for exporting oil to developed country markets.
Focus on Finance
In most cases, improved access to finance provides an opportunity to increase revenue generation and productivity throughout the oil export value chains. Every oil producing country should be in the position to highlight various ways that can improve access to finance since it can help expand the business. Large oil traders need access to both short and long-term financing to help them cover the costs of shipping and inputs.
Smaller oil traders in developing countries need access to short-term loans to help them improve their oil exportation process. Future programming can also help since it boosts sector reforms like the purchase order financing and the secured transaction reforms to unlock economic growth.
Combining Long-term and Short-term Export Growth Policies
Oil producing countries should understand that stimulation of economic and export growth needs the combination of both long and short-term policies. Also, it is essential for these countries to exploit complementary between the foreign countries and other domestic policies that are aimed at enhancing the technological and productivity content of the oil products.
The strategic collaboration between various levels of governments in oil producing countries and the international levels, as well as private sectors, are the critical elements for oil exportation and policy success. Also, oil producing countries should improve cooperation among economic actors since it favours export growth. Currently, there are various strategies that help oil-producing countries to increase awareness about the possibilities of using oil export consortia to access the international markets.