Why 2026 brings a transformation imperative to oil & gas and chemicals

From silos to synergy, US oil & gas and chemicals companies need a transformational mindset to create value across the enterprise in 2026.

In brief

• Short- and long-term pressures necessitate focusing on effectiveness across the entire enterprise rather than siloed functions.
• Durable growth and business resilience require improving the flow of goods, capital, talent and data across the value chain.

For US oil & gas and chemicals companies, 2026 brings a transformation imperative — to facilitate both growth and resilience.

Thriving through uncertainty by centering on operations

Fortunately, realizing the benefits of this type of transformation does not require a complex, multiyear enterprise-wide transformation. In fact, it is often an advantage to start at a smaller scale and develop quick wins, both to identify measurable gains that help justify further efforts and to build momentum and buy-in from those directly affected by the transformation. 

Increasingly, one of the most impactful places to find these early wins is in lowering the carbon intensity of core operations — efforts that not only reduce emissions but also cut energy waste, improve throughput and strengthen operational reliability.

The key is not scale in execution but rather scale in design. Traditionally, companies have approached transformation with a narrow focus on lowering the cost of support functions such as finance, HR, procurement and IT. But reduced general and administrative costs alone rarely translate into improved operational performance. Furthermore, with disruptions coming in both technology and the shape of the future workforce, what businesses often need is a change to demonstrate the company has both the capabilities and capacity to achieve its strategic ambitions. 

Embedding low carbon, energy efficient operating practices into that capability set helps companies streamline processes, reduce downtime and capture efficiencies that otherwise remain hidden inside siloed systems.

This approach requires business unit owners to be drivers of transformation, even for those efforts that are outside their fence line and limited in scope to a discrete function. The true north for transformation of these outside-the-fence business functions then shifts from a traditionally narrow focus on cost to the achievement of those capabilities the business units need.

Success requires establishing a platform or network of platforms that facilitate the easy flow of critical information among all collaborators responsible for developing these capabilities and outcomes. Information also needs to flow both upstream and downstream. 

Business unit leaders need to be owners of transformation agendas to enable alignment with actual operational needs, as well as with overall strategic objectives. But at the same time, when strategic planning offices and the C-suite similarly have better insights into operations, they can better plan future growth around more timely data and realistic assumptions about the achievable objectives from both organic and inorganic growth.

This tie-in with planning functions significantly enhances the ability for strategic planning to satisfy both investor expectations and strategic ambitions. Successfully navigating competing demands requires a strong focus on cash flow management, including a clear view of projects in various stages of development. Anchoring planning in better insights from real-time operational performance yields both more robust projections of impacts to the bottom line, as well as scenario planning to evaluate plans against various contingencies. A platform that allows greater visibility across the value chain builds optionality and resilience in periods of more challenging project economics by highlighting where lower carbon, lower energy processes can unlock flexibility — whether by adjusting the timing of short cycle projects or advancing high graded opportunities.

For the C-suite, a clear articulation of strategic objectives is essential to secure the right to grow from investors. 

“Whether the preferred route is large capital investments in traditional business units, development of novel opportunities or strategic acquisitions, communicating the rationale effectively to capital markets requires a deep understanding of both current capacities and capabilities, and how this strategic initiative will either enhance or supplement these,” says Hemant Kane, Principal, EY-Parthenon, Ernst & Young LLP. 

Shaping this value proposition requires data-supported decision-making on future activities, and follow-through from the enterprise in close alignment with the commercial objectives. 

Building resilience through collaboration

Recentering transformation in this manner requires a focus on capabilities. In turn, this shifts the focus to the workforce and how companies want their teams to work in the future. This is especially challenging in oil, gas and chemicals where often firms are facing an ageing workforce in a time when the industry is no longer seen as an attractive career path. 

“A transformation of the workforce begins by not thinking about how we can do our work today better, but instead framing the question of ‘what do we need to do in the future work environment,’” says Timothy Haskell, EY Americas Oil & Gas and Chemicals Leader for People Consulting.

Understanding what is critical for an enterprise, a business unit or a business function often uncovers how that can best be done. While a future workforce will be comprised of upskilled staff, centers of excellence and automated processes and artificial intelligence (AI) supporting key decision-makers, collaboration with the external ecosystem remains an often-overlooked element.

To be certain, companies are beginning to approach traditional vendors with new contractual relationships, but the fundamental relationship between the contracting party and the vendor remains largely unchanged — the company is in essence inviting the vendor in to perform a function it has defined, with varying degrees of freedom to define its approach to the work.

A more collaborative approach invites vendors to engage as partners in addressing underlying business problems, sharing perspectives, knowledge and experience from solving similar problems across customers and industries. This approach depends on trust, as well as the recognition of vendors’ capabilities and their potential to drive meaningful impact. When these elements are in place, the relationship can evolve from a transactional arrangement into a preferred partnership — reflected not only in contract language, but in the work performed by the joint teams.

Achieving success and building resilience through the uncertainty in the 2026 marketplace and over the medium term will require innovation-led growth and a bold vision that reimagines both the work and how it is accomplished. The companies that will shape the future of the industry will be those that focus on the capabilities required to realize their strategic ambitions and look beyond traditional boundaries to their full ecosystem — engaging with talent to bring the best perspective to address strategic problems and create future business.

Inspiring growth through new product pathways

A price downturn in the current political environment may seem like an unlikely opportunity to focus on growth. Given the long-term pressures of the sector, the companies who simultaneously focus on both resilience and future growth are best poised for success. 

One area of growth with increasing attention centers around carbon.

Across the industry, companies are split on how best to capture emerging value related to carbon. Some — like those investing heavily in carbon capture, utilization and storage (CCUS) — are preparing for a world where carbon is fully commoditized, creating transparent markets that reward lower carbon production. Others are taking a contract-centric approach, securing premiums for specific low-carbon products through bilateral agreements, whether in sustainable aviation fuel (SAF), liquefied natural gas (LNG) or carbon-neutral gas deliveries.

“Both models, the commodification of carbon and the decommodification of core products, unlock growth,” explains Ryan Bogner, EY Americas Digital Sustainability Leader. “The approaches simply reflect different answers to the same question: Do you want the certainty of long-term offtake agreements today, or the upside that comes from deeper, more liquid carbon markets tomorrow?” 

“The development of deeper markets for carbon-advantaged fuels and products could be a boon to US producers,” Bogner says. “Not only are many US oil and gas fields produced with relatively low carbon intensity, but US companies can and have taken significant action to materially lower carbon intensity as well.” 

Ultimately, in a down price environment, finding areas with price premiums is critical. As companies are finding markets for lower carbon fuels, lubes and chemicals, they are also exploring additional uses and commercial opportunities for natural gas products — both domestically and abroad.

While these markets are currently modest, there is an expectation these will continue to expand, and government policy support could also accelerate as process classification framework standards are adopted and incentives can be more accurately targeted. Further, the use of natural gas as a fuel to the data center boon means companies can set up joint ventures with hyperscalers and cloud providers for gas products essential to powering these hubs. 

“Natural gas is hitting an inflection point. New geographies want lower-carbon molecules, and data centers need dense, reliable power,” says Josh Loftus, Energy Markets Director, Ernst & Young LLP. “Whether it’s supplying emerging LNG markets or fueling compute directly from the field, gas is becoming a growth product again — one that can serve both the energy transition and the digital economy.”