Dan Yergin, an oil expert, told this week that the oil market is in trouble and facing double crises; the first one is OPEC+’s members separation that causes a reduction in oil supply, and secondly, the demand for oil has been reducing globally to a significant amount.
Thus far, Coronavirus had infected more than 700.000 persons all around the world, figures calculated by the Johns Hopkins University. Moreover, round about 34,000 patients have died from that virus.
As a result, countries have to apply lockdowns, and travel restrictions to control the Coronavirus pandemic.
Yergin told that airplanes not in the air, people not working, factories not operating, and cars not on the road. He continued that they see, in the coming month of April, there could be a twenty million barrel a day reduction in oil demand. He added that it is unusual and 6 times greater than the fall during the financial crisis period of 2008.
According to an OPEC’s calculations, global oil demand in 2019 was at around 99.67 million barrels per day.
Primary oil producers Russia and Saudi Arabia have announced that they would expand the oil supply in April when OPEC+ agreement will reach its end; that deal will be expired at end of the March.
Dan Yergin even told that any possible solution to crude oil price crises is to pass through the G-20, which particularly adds all other oil providing countries. Furthermore, he added that Saudi Arabia and the United States have very good connections; Moscow and Washington don’t have much platforms to interact.
He said maybe G-20 offers an avenue to accomplish resolution and provide aid to stabilize the oil market in this very difficult time, and Coronavirus continues.