By: Gaston Saidman

The new plague known as the corona virus keeps the world on alert. The price of the
oil stock prices was already worryingly low. In the energy market, the mineral better
known as black gold (oil) has been unstable since 2018.The new virus definitely
caused the price to drop to $ 20.30 BPD.
The corona virus effect came at a rather complicated time for the crude oil trade,
today this mineral is not the only one that provides energy and it is known that many
countries began a series of investments in new technologies and renewable energy.
Considering that in this area there are a lot of the oil-producing countries, adding to
that the large reserves of natural gas discovered offshore in northern Israel, the Middle
East is a power to consider in energy resources, but destiny, along with the new
discoveries, seems to be a negative factor on the economy, withholding a lot of the
transfer of crude from Asia to the Persian Gulf countries, even leading to Saudi
Arabia itself decreasing its oil demand.
This decrease in oil demand is a trend that came to the Middle East from Saudi
Arabia, who realized that in order get out of its economic crisis it can no longer rely
on black gold.
Today we can see their interest in new Start-ups and also the surprising relations with
the western countries, including Israel. Saudi Arabia along with the United Arab
Emirates who are the main producers of crude oil in the Middle East and OPEC want
to reduce their dependence on it, many companies within the Kingdom have already
started to invest in "clean energy", providing significant savings not only to the
companies themselves but to the governments as well.
As we know, the best strategy in the face of any crisis in this market was to reduce
crude oil production to raise the price. The problem that the price is “stuck” and in
order for producing countries to have some kind of profit, it would have to reach 70
dollars per barrel, and that is far from possible. The corona virus immobilized the
Midstream companies responsible for their transport, and the new reduction in
production proposed by OPEC created a new conflict between Russia and Saudi
According to Putin, Russia is satisfied with the price, but the Saudi purposes is no
longer to raise the price but to prevent a resounding fall, which the intervention of the
big banks is not managing to do even with their investments.
Cutting production means canceling 400,000 BPD more than the million that was
already decided on, but Russia refuses to do so and such and agreement cannot be
achieved without Russian consent, Now it is uncertain how the Moscow-Riyadh
alliance will continue.
The drop in demand, the search for new resources and the virus that paralyzed much
of the Asian market, could be a trap in which the reduction in oil production will not
help the biggest players in the oil market.
Russia may face the crisis, but will Saudi Arabia too?