Saudi Arabia is being blamed for the instability in the oil markets following its move in March to force prices down (AFP)
Middle East Monitor: 'Dangerous crossroads': Gulf rulers in peril as economic shocks continue
Drop in oil prices and hit from coronavirus are exposing unwise policies and raising fears of a plunge into violence
Nearly two months ago, before the global spread of the coronavirus, Riyadh made a bold gambit to slash oil prices.
The Saudis knew it was going to hit their bottom line – their break-even oil price to balance the budget – but they did not foresee such a dramatic slump in demand as the global economy ground to a halt.
Economists described the impact on Middle Eastern economies as a “dual shock”.
Last week, West Texas Intermediate (WTI) oil, the US benchmark for the commodity, entered negative price territory for the first time in history, economically impacting Gulf oil producers yet again, albeit in a lesser, but third shock.
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WNU Editor: All of the Gulf states are facing the same crisis, their financial revenue streams have collapsed .... Saudi Arabia blows through foreign reserves as budget woes mount (Al Jazeera). And with oil producers now producing 30 to 40 million barrels per day that the world does not need, these price and economic shocks are going to continue for a long time. My prediction. Stability in oil prices will only occur when the pandemic is over, and the global economy recovers. At best .... I see this only happening late 2021 or even 2022. Can these Gulf rulers survive until then? We shall see.
