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The COVID-19 Pandemic, Price War and International Crude Oil Market Landscape
2020-11-23 11:24:00

Understanding International Politics after Covid-19

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The COVID-19 Pandemic, Price War
and International Crude Oil Market Landscape

Yongzhong Wang


In recent years, the U.S. shale oil and gas revolution has reshaped the global energy supply landscape, exerted a huge impact on existing oil and gas pricing mechanism, significantly improved the United States' dominant role in the geopolitical game of international crude oil, and weakened the negotiation power of OPEC in formulating crude oil prices. Meanwhile, the U.S. shale oil and gas revolution has significantly eased the pressure of international crude oil supply, weakened the bargaining power of producing countries, and strengthened the negotiation power of consumer countries. Although the alliance between OPEC and Russia will delay the adjustment of global energy landscape, the political conflicts and differentiated interests in member countries, coupled with the rapid development of natural gas and renewable energy industry, will pose severe challenges to OPEC+ in maintaining its price influence. In addition, the COVID-19 pandemic has plunged the global economy into deep recession and led to a sharp decline in oil demand, which has profoundly altered the bargaining power of oil producing countries and consumer countries, and intensified the conflicts among oil producing countries in seizing the market. The oil price war between Saudi Arabia and Russia has exerted superimposed impacts on global oil market, intensified the situation of crude oil supply surplus, led to the collapse of oil prices, and affected the stability and security of global crude oil supply. However, with the conclusion of agreement on slashing oil production and the continuous recovering from the pandemic, crude oil demand will gradually rebound, but the supply and demand of the international crude oil market will be in a weak balanced state, with high uncertainty risks.
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I. Motivation, Objectives and Behaviors of Main Oil Producing Countries
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II. COVID-19 Pandemic, Saudi Arabia - Russia Oil Price War and Production Reduction Agreement
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III. The Impact of COVID-19 Pandemic on International Crude Oil Market Landscape
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