OPEC and IEA have warned that developing countries could lose up to 85 per cent of its receipt from the oil and gas should the market conditions persist.
IEA Executive Director, Fatih Birol and OPEC Secretary General Mohammed Barkindo on Monday expressed “deep concerns” about the coronavirus pandemic, warning tgat it could have “potentially far-reaching economic and social consequences.”
Birol and Barkindo stated that dip in income from the oil and gas industry could fall from 50% to 85% in 2020.
They singled out public sector spending in vital areas such as health care and education as being especially vulnerable.
International benchmark Brent crude traded at $29.91 Tuesday morning, down around 0.7%, while U.S. West Texas Intermediate (WTI) stood at $28.98, more than 1% higher.
Oil prices slid 10% in the previous session, as the coronavirus continues to spread worldwide and amid an ongoing price war between OPEC kingpin Saudi Arabia and non-OPEC leader Russia.
Crude futures have more than halved since climbing to a peak in January.
However, Saudi Arabia’s state-owned oil giant Saudi Aramco seemed unperturbed by the current market situation as it hinted to likely continue with a planned oil production hike from April into May, reportedly suggesting it was “very comfortable” with an oil price of $30 a barrel.
On the part of Russia, the country refused to sign up to OPEC’s proposal of deeper production cuts earlier this month, and had claimed it could withstand lower oil prices for as long as a decade.
While OPEC’s Barkindo and the IEA’s Birol did not address Russia specifically in their joint statement, both however “underscored the importance of market stability, as the impacts of extreme volatility are felt by producers.”
They agreed to “remain in close contact on the matter” and continue their regular consultations on oil market developments.
Peace Obi
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