Global Oil Price War

The Saudi Arabia-Russia oil price war of 2020 is an economic war aroused in March 2020 by Saudi Arabia in response to Russia’s turndown to reduce oil production in order to keep prices for oil at moderate levels. On 8 March 2020, Saudi Arabia initiated a price war with Russia, resulting in a 65% quarterly fall in the cost of oil. In the first week of March, US oil prices dropped by 34%, crude oil dropped by 26%, and Brent oil dropped by 24%. Finally, Russia has to pay a hefty charge to end the oil price war. The current scenario on oil crisis tells that global oil demand is expected to fall by a record 9.3 mb/d year-on-year in 2020.

This economic dispute led to a drastic decline in oil prices as well as in production level. The coronavirus pandemic and a sudden fall in oil prices have caused major destruction to economic growth. The price war is one of the major reasons behind the Global Stock-Market Crash.

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