Other Sectors

Oil's not well

Crude oil output war, demand slump drubbing prices
Good for government, not so for oil marketers



Oil prices collapsed on March 8, 2020, after Saudi Arabia announced a material increase in production to defend its market share.


Prices had already plunged to $45 per barrel on March 6, as Russia broke ranks with the Organization of Petroleum Exporting Countries and allies (OPEC+), following differences over a cut in production during their meeting in Vienna.


That triggered Saudi Arabia – OPEC’s largest oil producer - to announce a price war by offering enormous discounts of $6-8 per barrel on its April selling price. Not surprisingly, crude prices nosedived, with Brent losing as much as ~30% to $31 per barrel on March 9.


The roil comes at a time the Covid-19 pandemic has renewed worries of a fresh decline, in an already sagging market because of the global economic slowdown.