The global crisis caused by the coronavirus pandemic will be felt throughout oil’s global supply chains, the International Energy Agency (IEA) said. The crisis would also affect other parts of the energy sector.
With further pressure from a supply shock due to the end of production cuts from OPEC producers and Russia, oil prices crumbled as the pandemic slashed global fuel consumption.
Crude oil prices declined about 55 percent in March, the most on record. The first quarter ended with oil prices’ biggest losses in history. Prices on Monday also slumped to their lowest level in 18 years.
In Western Canada, prices available to producers have dropped to single digits. For other grades in parts of North America, instances of negative prices have also emerged. Major reductions implemented by oil producers to their spending on new production.
For selected producer countries, IEA had earlier estimated 50 percent-85 percent drops in net income in 2020. Depending on the extent of the demand shock, these declines could be even greater.
