PESTLE Analysis of ExxonMobil

ExxonMobil is an oil and gas-producing American multinational company. Lee Raymond and Lucio Noto founded the oil and gas company in 1882. Today, we’ll discuss the PESTLE analysis of ExxonMobil; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.

Political Factors Impacting ExxonMobil

Some of the main political factors in the ExxonMobil PESTLE analysis are as follows;

I-Oil Exploration Policies

The governments of different countries are introducing new policies and regulations to discourage oil exploration companies. It is due to the environmental protection and sustainable trends. For instance, the UK government has recently introduced new licenses and policies for oil and gas companies like ExxonMobil for their exploration in the North Sea. It is compelling them to shift their business to alternative sources of energy.

II-Alliance and Political Relations

Relationship and alliance with OPEC (organization for the petroleum extraction countries) plays a key role for ExxonMobil to smoothly perform their operations. For instance, OPEC has recently passed an agreement collectively to decrease the oil production rate by 2 million barrels per day. It caused the shortage of oil in the global market and it increased the price of oil as a result.

III-Regulatory Changes

When a new political government comes into power it introduces new policies based on the interests of stakeholders. For instance, when a pro-environmentalist government comes into power, they would introduce strict policies for oil exploration and extraction companies like ExxonMobil. It directly impacts the business, sales, production, and distribution of oil and gas.

Economic Factors Affecting ExxonMobil

Some of the main economic factors in the ExxonMobil PESTLE analysis are as follows;

I-Volatile Oil Prices

The oil price market is highly volatile and it keeps on changing its prices daily depending on various political and economic factors and oil demand and supply. A sudden decrease and increase in oil price would directly impact the sale, cost, and expenses of ExxonMobil; ultimately impacting the company’s revenue and profitability.

II-Economic Recession

The global economy has been going through a recession since the pandemic crisis. As a result, the unemployment rate has increased significantly, and it decreased the purchasing power of customers to a great extent. People are limiting their spending on traveling and other luxury items, and it decreases the sales of various businesses and companies.

III-Currency Exchange Rate

The currency exchange rate market is also highly volatile. ExxonMobil is operating its business in the global market; a significant amount of the company’s revenue comes from foreign and international markets. However, when the company converts its earnings back into the USD, they decrease due to the currency rate differences of various countries.

Social Factors Impacting ExxonMobil

Some of the main social factors in the ExxonMobil PESTEL analysis are as follows;

I-Sustainable Market Trends

The consumer market has become highly cautious about nature and environmental sustainability. They’re making intentional choices and shifting away from the consumption of oil, carbon, and hydrocarbons. However, the environmental sustainability customer market trends have decreased the sales and revenue of ExxonMobil to a great extent.

II-Renewable Energy

Speaking of market trends, the customer’s market has shifted their interest to renewable sources of energy. They are buying products and goods from companies that are sustainable. However, it puts great pressure on the company to shift its focus to renewable sources of energy to keep up with the growing customer market trends.

III-Community Relationships

ExxonMobil is investing a significant amount of capital resources back into social and community projects like health, education, and community development. According to an estimate, the oil and gas brand invested approximately 210 million USD in community development programs. It shows the company’s strong commitment to the nature and the environment.

Technological Factors Affecting ExxonMobil

Some of the main technological factors in the ExxonMobil PESTEL analysis are as follows;

I-Latest Extraction Technology

ExxonMobil is investing in the latest and most advanced oil drilling and extraction technology. It allows the oil and gas brand to efficiently perform its various operations and decrease the wastage of time and resources. Most importantly, the advanced drilling technology is amplifying the production capability of the oil and gas brand.

II-Alternative Sources of Energy

ExxonMobil has allocated a significant amount of capital resources to the development of alternative sources of energy. They are like biofuel, solar panels, wind turbines, hydrogen energy, and others. However, the investment in alternative sources of energy would help the company to strengthen and diversify its business and market position.

III-AI and ML

ExxonMobil is also employing the latest AI, ML, and data analytical tools. They help the company to make efficient decisions based on the previous data and various other variable factors. According to an estimate, the oil and gas brand has decreased the failure rate by 20%.

Legal Factors Impacting ExxonMobil

Some of the main legal factors in the ExxonMobil PESTEL analysis are as follows;

I-Regulatory Compliances

ExxonMobil should comply with the environmental sustainability and carbon emission rate regulations of different countries. It allows the company to avoid any public backlash expensive lawsuits and heavy legal fines and penalties.

II-Trade Regulations

ExxonMobil should also comply with the trade regulations and government regulations of different countries. A tense political environment would make them change their trade regulations and alliances, and it negatively impact the operations of ExxonMobil.

Environmental Factors Affecting ExxonMobil

Some of the main environmental factors in the ExxonMobil PESTEL analysis are as follows;

I-Carbon Emission Rate

ExxonMobil has a very bad track record when it comes to environmental sustainability and carbon emission rates. The oil and gas brand is investing a significant amount of capital resources in sustainable energy projects and alternative sources of energy, and it helps the company to decrease the carbon emission rate.

Conclusion: ExxonMobil PESTLE Analysis |PESTEL Analysis of ExxonMobil |External Environmental Analysis of ExxonMobil | Strategic Analysis of ExxonMobil

After an in-depth study of the pestle analysis of ExxonMobil; we have realized that ExxonMobil is the world’s leading oil and gas manufacturing brand. If you are learning about the ExxonMobil PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.