The geopolitics of oil over the past 50 years has
played a central role in energy markets. The recent oil price crisis clearly
shows the scope of energy geopolitics. Because this crisis affects exporting
countries in different ways. Oil price crisis happened lots of times but this
time is different because of a huge demand and supply shock. At the OPEC + meeting held on March 9, Saudi
Arabia and Russia's disagreement continues to influence the markets more than
ever before. The most important reason that makes this crisis different from
the others is the Corona virus effect. In this crisis, oil prices have reduced
almost 20 dollars. The results of
the geopolitical tension between Saudi Arabia and Russia, oil price crisis
continue increasingly.
Saudi Arabia wanted to prevent the fall in oil prices
caused by the economic slowdown caused by the Coronavirus. But OPEC+ meeting to
reduce oil production was failed. Saudi Arabia, who received a negative response
from Russia, announced that they would increase their oil production. This was
a call for a price war. 24 days have passed since the failed meeting and now
the price of oil has become cheaper than water. This price decrease seems to be
against the exporting countries.
When we look at the causes and consequences of the
last oil price crisis within the framework of energy geopolitics, Russia, Saudi
Arabia and the USA play an important role. Although Saudi Arabia and Russia are
often mentioned in every news or discussion content, actually the key point
here is the USA. One of the luckiest countries in the crisis will be the USA. Especially
considering shale oil, major US oil companies will make significant profits
from this conflict. In the oil geopolitics, the United States has some possible
market-oriented ways its sleeve every time.
Also we cannot forget Middle East countries.
Especially Iran energy market is important in this condition. Iran nowadays
fighting with several problems that are sanctions, reduction oil revenues, and
the spread of Coronavirus.
Lastly, oil price crisis it remains unclear how long
the rout in energy markets. Which country will take the first step to regain
agreement? and Which countries other than America will benefit from this
crisis? The answers to these questions will give us clear information about the
background of energy geopolitics.
References
Jason
B. ( 9 March 2020). Why This Oil Crash
Is Different, FP News,
Seeking
Alpha. (16 March 2020). A Bird's Eye View Of The Oil Crisis: Geopolitical
Backdrop.
Slawomir
R. (17 March 2020). Crude Oil Price Wars in the Era of Pandemics. Valdai Dicussion Club.
David
S. P. (2014). Oil and Geopolitics: The Oil Crises of the 1970s and the Cold War.
Dryad G. (10 March 2020). Who
Pays? Geopolitical Consequences Of An Oil Price War. Dryad Global.
US Energy Information
Administration (EIA). What Drives Crude Oil Prices?
Barış S. (2020). Enerji
Sohbetleri.
[1] This
paper has been prepared for ESD 540 Class which is Energy and Sustainable Development department at Kadir Has
University.
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