COVID-19 menaces oil market
The novel coronavirus pandemic could have an even greater impact on the global oil glut than the Saudi-Russian showdown over prices and output.
Even as Saudi Arabia announced March 30 it will boost its oil exports yet again in its price war with Russia, concern is rising over the ultimate implications of the coronavirus pandemic on global oil demand.
At this stage, international oil market analysts appear unwilling to forecast just how much damage the virus could finally do to demand because of travel restrictions, but are painting a bleak picture of the outcomes likely to emerge.
“The most fundamental issue the oil industry currently faces is COVID-19, and it is much too early to conceptualize what its impact is and how it may metastasize,” Justin Dargin, a global energy expert at the University of Oxford, told Al-Monitor.
“The disintegration of the OPEC+ consensus is a politicized supply-side issue that can be resolved by round tables and diplomatic couriers. The potential collapse of global demand, however, is due to what is — as the insurance industry terms it — an act of God.”
