Although current crisis in the oil market is a result of different events and factors, the most crucial is the spread of the novel coronavirus and the preventive measures taken by governments, Pavel Sorokin, Deputy Energy Minister of Russia, stated.
Sorokin said that the coronavirus has had a “stunning” effect on the oil industry as about 60% of oil is consumed by transportation servicing (planes, ships, cars, etc.), yet due to quarantine measures the demand has decreased sharply, which affected the market.
Deputy Minister noted that Russia is also facing difficulties amid the pandemic, yet Russian government is set to pass it guided by ‘common sense.’
General Director of the National Energy Security Fund Konstantin Simonov pointed out a political aspect of the current crisis – failure of OPEC+ and disagreements between Russia and Saudi Arabia.
According to Smirnov, terms ‘price war’ and ‘oil war’ are quite consistent with the reality.
“Saudi Arabia made us an offer that we could not agree to. They needed a reason, after which they went to certain actions – increased production, used reserves. In two or three days this situation will not be resolved – this is a war of survival, a war of nerves,” he said.
The expert also stated that Russian Ministry of Energy should stand by national interests to prevent panic and spread of misinformation.
Marc-Antoine Eyl-Mazegga, director of the IFRI Energy Center, claimed that there are no winners in the current situation. He added that the leading oil producers now have to bear in mind that they are responsible for the outcomes.
Two other experts – Abbas Maleki, Associate Professor, Department of Energy Policy, Sharif University of Technology in Tehran and Omar Al-Ubaydli, Director of Research at the Bahrain Center for Strategic, International, and Energy Studies, looked at the crisis from a different perspective.
They came to a conclusion that the global economy would suffer until the COVID-19 pandemic is over, and everybody should be ready for that.
Vesna News — official website