US, WASHINGTON (ORDO NEWS) — This was not 17 years old. March 18, the price of a barrel of American oil collapsed by 24%. Her “colleague” Brent from the North Sea lost 13%, dropping below $ 25.
Despite the rise of March 19 in the light of ECB decisions, quotes in total dipped by more than 50% since January.
The market was the victim of a double blow. On the one hand, the epidemic led to a real paralysis of the economy, which caused a sharp decline in production.
On the other hand, Saudi Arabia sharply increased production as part of a trade war with Russia and the United States. This suicidal strategy plunges the oil market into chaos and entails only losses for everyone.
Three major global manufacturers (Russia, Saudi Arabia and the United States) will certainly suffer considerable damage. Nevertheless, their financial reserves will mitigate the blow.
This cannot be said about other oil exporting countries, most of which are developing countries in Africa and Latin America. For them, a fall into the abyss began.
According to the International Energy Agency, they will lose more than half of their income. In an oil-dependent country like Ecuador, it will be about 85%. Currencies of Mexico, Brazil and Colombia rolled down after oil quotes.
What about countries like Iraq and Iran? In Baghdad, the budget deficit reaches $ 4 billion per month. Soon he will have nothing to pay civil servants.
For Tehran, the fall in prices and the Covid-19 pandemic became a real disaster against the backdrop of US sanctions. The situation is ruining the remnants of its economy and creating chaos in healthcare.
This is a prelude to what Africa can expect in a few weeks. A real storm is approaching Algeria, Angola, Nigeria and many other states.
Western markets are in decline, and today oil brings almost nothing, although it used to be their main source of income. In addition, the approaching coronavirus threatens to bring down the already fragile socio-political system. It is a crisis of planetary proportions.
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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.