WHEN the oil price collapsed in the late 1990s, so did the capital of Europe’s oil-and-gas industry. Thousands of foreign workers had been flown to Aberdeen, on Scotland's north-east coast, to work on North Sea rigs. They left in droves and the local economy entered a mini-depression. How has the city responded to the latest oil crash?
When oil prices plunged again last summer the omens did not look good: 40,000 jobs in Aberdeen (about a third of total employment) are dependent on oil and gas. Worse, getting oil out of North Sea reserves is expensive because much of it is difficult to extract. But in addition, the industry had grown fat on meaty oil prices over the past few years. Workers who weren't especially skilled commanded six-figure salaries. By 2012 Aberdeen had the most millionaires per person of any place in Britain, including London. Aberdeen’s high costs means that it struggles to cope with cheaper oil more than, say, Saudi Arabia.
Walk around the Granite City—which, even in midsummer, can be a soggy experience—and it is clear that the oilmen have seen better days. Aberdeen’s fancy restaurants are two-thirds empty. The hotels—which...Continue reading
via Brian Rushton, How falling oil prices have affected Aberdeen
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