Oil and gas incomes in emerging markets could drop by 85% this year on coronavirus fears, energy watchdogs say
- Energy market leaders from the IEA and OPEC have estimated that income from oil and gas could fall between 50% and 85% in emerging markets as a result of coronavirus.
- Oil prices have fallen more than 50% since the start of 2020 following a slump in demand and a price war between Russia and OPEC+ members.
- Many oil-producing emerging economies are reliant on energy to fund key public services and will be hit hard by the drop.
The continued fall in oil and gas prices will have a profound impact on the income of economies dependent on natural resources, according to leading oil industry figures.
In a phone call, the IEA's Dr Fatih Birol and Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), Mohammad Sanusi Barkindo discussed the fall out from the crash in energy prices from coronavirus.
They noted that "if current market conditions continue, their income from oil and gas will fall by 50% to 85% in 2020, reaching the lowest levels in more than two decades." Oil-producing countries such as Russia, Venezuela, and Saudi Arabia are highly dependent on energy prices to pay for public services. "This is likely to have major social and economic consequences, notably for public sector spending in vital areas such as healthcare and education," the pair added in a release.
Oil prices have fallen more than 50% since the start of 2020 following a slump in demand and a price war between Russia and OPEC+ members. Travel bans by the US and various European countries has also contributed to prices cratering.
As of 11.20 a.m. in London (7.20 a.m. ET) Brent Crude prices were up 1.1% to $30 a barrel while WTI prices rose 2.5% to $29.8 a barrel.
Get the latest Oil WTI price here.
- I'm a 56-year-old IT worker who got laid off last year and have been unemployed ever since. I have a hunch I'm not finding work due to ageism. How do I prove it?
- WhatsApp introduces the “Message Yourself” feature, working on voice status updates and more
- DeSantis says Congress should act if Apple follows through on Elon Musk claims and bans Twitter from App Store
- Gland Pharma announces acquisition of Europe’s Cenexi Group for €120 mn, shares fall 4.37%
- Affordable smartwatches make India the biggest smartwatch market in the world
- Rupee gains 17 paise to 81.55 against US dollar
- Indian markets open tad higher ahead of GDP data -- Zomato, SBI, NDTV, Britannia Industries among stocks to watch
- Government lifts ban on organic non-basmati rice exports