Could Low Oil Prices Spark A New War In The Middle East?

April 27, 2020: Could Low Oil Prices Spark A New War In The Middle East?

It may seem that the worst-case scenario has already come to pass, as United States crude prices plunged far below zero on Monday, with the West Texas Intermediate crude benchmark closing out the day at negative $37.63 per barrel and the international Brent Crude benchmark hitting an 18-year low. While oil prices have since recovered considerably, however, many industry experts say that it’s more than likely that we haven’t seen the worst of it yet. The problems that drove oil prices so low to begin with still persist. It all began with a drop in oil demand as the novel coronavirus epidemic turned into a pandemic as it spread around the globe, shutting down major economic sectors and supply chains. When Russia and Saudi Arabia, the leading members of OPEC+, met to strategize, however, the talks turned sour and quickly devolved into an all-out oil price war and an oil glut of a whopping 10 million barrels of oversupply per day. When the oversupply threatened to exceed available storage, owning oil became a liability, and oil prices plunged below zero in the U.S.  Read more