What record low oil prices mean for exporting and importing nations.
It’s Simply Never Simple
Brent futures recently dropped to $36 per barrel, falling nearly 30% in a single session. And as it happens every time oil prices experience significant shifts, some countries stand to lose while others stand to gain.
This time around, though, it might not be as simple as that. While record low oil prices – provided they sustain – could decrease oil exporting nations’ profits and make winners of oil-importing nations, a host of international factors have complicated the outlook.
For starters, the past few years have been tumultuous for globalisation and trade, thanks to the brutal trade wars, especially the one between the US and China. Secondly, China, the world’s second-largest economy, has been seeing its growth decelerate. Similar slowdowns have plagued other emerging economies like India. Thirdly, and probably most crucially, the coronavirus outbreak, which originated in central China, has spread across the world, decimated demand and slashed growth forecasts.
Due to these reasons, lower oil prices might not signify rosy prospects for importing nations, which may see gains offset by impact from the COVID-19 fallout. [ToI]
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