In this on-demand webinar, originally recorded 19 March 2020, we examine: the economic effects of the coronavirus disease (COVID-19) virus now a serious threat to oil demand, and the breakdown of the Vienna Alliance raising the prospect of unchecked supply, crude prices for 2020 are likely to be substantially lower than projected even a few weeks ago. Assuming an average Brent price of USD40/barrel (bbl) for 2020 – a plausible scenario given current and projected market weakness – most major OPEC and Vienna Alliance producers will face current-account and/or fiscal deficits.
How producing countries decide to cope with these challenges will depend on the strength of their economies and their ability and willingness to adjust oil exports, imports of goods and services, and government spending. In turn, the resilience of major oil producers in the face of severe economic stress – along with the evolution of market conditions – will likely determine whether and when governments return to the table to discuss potential new collective action.
IHS Markit Solutions Utilized for this Analysis: