Sudden shocks in the oil markets can lead to victims around the world, from energy companies and their employees to governments, whose budgets are tied to the price of oil.
Several months would pass before the world will be able to evaluate this recession. The impact on the us economy will be significant, especially in Texas and other States where oil occupies a large part of the labour market.
Due to the fact that the outbreak of coronavirus slows down the manufacturing, transportation and other energy-intensive types of economic activity, demand will probably remain weak. Even if Russia and Saudi Arabia resolve their differences which led the Saudis to lower prices after Russia refused to participate in the reduction of production, the global oil glut may keep prices lowyears.
Many small U.S. oil company may face bankruptcy if the price pressure will continue for more than a few weeks, while the larger will be faced with the challenge of protecting their windfall. .
Battle in the oil market will create serious difficulties for many other oil producing countries, especially Venezuela, Iran and several African countries, with political consequences difficult to predict.
The only winners can be drivers who pay less for gasoline, especially those who have older and less fuel-efficient vehicles, and who tend to have lower income.