Oil prices plummet again; Oil production economies into crisis

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Oil prices drop

Oil prices fall in the global market as Corona continues to expand. The main reason for the drop in oil prices is the shortage of oil requirements and lack of storage facilities. US West Texas Intermediate crude oil fell 7.14 percent to $ 12.1 a barrel. The 25 percent decline in prices happened on Monday. The fall in oil prices has had serious impacts on the stock market as well.

In the wake of the ongoing global lockdown, the economic sector’s performance has been almost stagnant. Producer and consumer countries do not have the capacity to store oil. Public and private travel systems are strictly prohibited in most countries. Oil consumption has fallen by 30 million barrels per day since the lockdown. The OPEC countries and Russia have agreed to reduce oil production by 10 million barrels from May 1. The fall in oil prices has hit the oil producer and the Middle East. The decline is reflected throughout West Asia.

Crude oil-dependent countries are trying to offset the revenue loss. The International Monetary Fund expects the economy of all Arab and Gulf oil exporters to shrink this year. The International Monetary Fund estimates that Iraq will have a five percent decline. The fall in oil prices could derail future investment and development projects.

Most countries are planning big cuts in the social benefits that millions of workers rely on to overcome the crisis. Saudi Arabia, the region’s largest producer of raw materials, plans to cut costs by five percent, or $ 13.3 billion. Other large global oil producers also face job losses and financial woes.

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