Reuters
FILE PHOTO: Crew members look over idle oil rigs in the Gulf of Mexico near Port Fourchon, Louisiana
- Energy market leaders from the IEA and OPEC have estimated that income from oil and gas could fall between 50% and 85% in emerging markets as a result of coronavirus.
- Oil prices have fallen more than 50% since the start of 2020 following a slump in demand and a price war between Russia and OPEC+ members.
- Many oil-producing emerging economies are reliant on energy to fund key public services and will be hit hard by the drop.
The continued fall in oil and gas prices will have a profound impact on the income of economies dependent on natural resources, according to leading oil industry figures.
In a phone call, the IEA's Dr Fatih Birol and Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), Mohammad Sanusi Barkindo discussed the fall out from the crash in energy prices from coronavirus.
They noted that "if current market conditions continue, their income from oil and gas will fall by 50% to 85% in 2020, reaching the lowest levels in more than two decades." Oil-producing countries such as Russia, Venezuela, and Saudi Arabia are highly dependent on energy prices to pay for public services. "This is likely to have major social and economic consequences, notably for public sector spending in vital areas such as healthcare and education," the pair added in a release.
Oil prices have fallen more than 50% since the start of 2020 following a slump in demand and a price war between Russia and OPEC+ members. Travel bans by the US and various European countries has also contributed to prices cratering.
As of 11.20 a.m. in London (7.20 a.m. ET) Brent Crude prices were up 1.1% to $30 a barrel while WTI prices rose 2.5% to $29.8 a barrel.
Get the latest Oil WTI price here.