R ES E A R C H & A N A LYS I S
COVID-19 OUTBREAK:
A BLACK SWAN EVENT FOR THE PETROLEUM INDUSTRY BY AMINA HUSSIEN, REHAM GAMAL & TASNEEM MADI
**The data & expectations were last updated on April 27, 2020 and they may differ due to the dynamics of the outbreak.
T
he international petroleum industry has been facing major threats since the global spread of the COVID-19 outbreak in January. Brent cr reversing the increase in prices achieved in the last four months of 2019. On March 18, Brent crude oil and Organization of Petroleum E Basket prices hit their lowest value since the first Gulf war in 1991, as they remarkably declined to about $20 per barrel, according to B 20, West Texas Intermediate (WTI) oil prices witnessed an unprecedented decline of about 300%, to reach below $0 per barrel. With the growing sense of uncertainty towards the future of the petroleum sector, this report intends to reflect the whole picture of COVID-19’s impacts onCOVID-19 the petroleum IMPACTS sector internationally and in Egypt. MARKET
ON THE INTERNATIONAL OIL & GA
Some parts of the report are based on a survey conducted by Egypt Oil & Gas’ Research & Analysis team to test the impact of the virus on different of on the Oil Prices i. aspects Effects sector. The survey targeted different categories in the sector, as C-level executives represented 41.5% of the respondents, while 30.2% were engineersOil andprices geologists. have been increasing prior to the outbreak, as the dema Research managers in oil and gas departments contributed as well.increasing and the market was at its boom. However, some action GLOBAL CRISES AND OIL PRICES FLUCTUATIONS Coronavirus spread, the Saudi-Russian oil war, drove the global oil plummet, and the oil prices witnessed an unprecedented decrease of ab Since the 1970s, oil prices have witnessed several fluctuations arising from global to February, according to Bloomberg and OPEC Secreta March compared crises. Starting from the Arab oil embargo crisis in 1973, one of the earliest oil crises that caused a surge in oil prices until facing the Covid-19 outbreak in 2020 which outstandingly brought oil prices to low values.
Global Crises and Oil Prices Fluctuations Since 1970s Crises/Factors
Oil Prices* ($/bbl) Arab Oil Embargo
OPEC+ oil market rescue talks break down
The Iran–Iraq War
6-Mar
OPEC Basket price .
The Iranian Revolution OPEC Basket price
Major Events Affected Oil Prices in the Outbreak
Italy declared a national quarantine
9-Mar
OPEC Basket price .
The st Gulf Crisis
Oil prices
Drop in Venezuelan Oil Production SARS Outbreak
11-Mar
WHO declared Covid-19 a pandemic
Oil prices -
Financial Crisis
Oil prices
-
-
Sustained Excess of Oil Supply Oil prices -
The Arab Spring The Civil War in Libya
UK announced 21-day lockdown
23-Mar
Oil prices -
*Oil Prices for Brent Crude Oil, WTI Crude Oil and OPEC Basket Price Sources: EIA, OPEC Secretariat, and Bloomberg
12 EGYPT OIL & GAS NEWSPAPER
International oil prices declined by an average of 66% from Novem April 2020. Brent crude oil declined from $62.43 per barrel to $25.27 per Meanwhile, WTI oil price decreased from $55.17 per barrel to $18.