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Saudi Acting Finance Ministry Says Gov't Will Take Measures to Deal With Drop in Oil Prices - Report

© REUTERS / Maxim ShemetovAn employee in a branded helmet is pictured at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019
An employee in a branded helmet is pictured at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019 - Sputnik International
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The oil market has been extremely volatile recently amid fears of the new coronavirus (COVID-19) spread and the failure of OPEC+ to strike an agreement on production cuts.

Saudi Arabia's acting Minister of Finance, Mohammed al-Jadaan, says that the government has taken measures to reduce the impact of falling oil prices and will take additional steps to curb the expected drop, SPA news agency reported on Wednesday.

"In light of the economic and global conditions caused by the global spread of COVID-19 virus, the reduction the prospects for global economic development, and the negative impact on economic markets, as well as its direct impact on the state budget of the Kingdom of Saudi Arabia, the government has taken measures to minimise the impact of lower oil prices", the minister said as quoted by the news agency.

The minister also noted that given the potential exacerbation of the effects of the COVID-19 spread, the items of expenditure will be reviewed and the government will make appropriate decisions "in a timely manner".

Earlier in the day, the price of WTI crude, one of several major benchmarks in oil prices, collapsed to $25.08 per barrel, its lowest indicator since November 2002.

Crude prices plunged last week by over 30 percent - their biggest fall since the 1991 Gulf War, following the OPEC+ failure to agree on production cuts amid global COVID-19 concerns. The crunch prompted Saudi Arabia to declare a price war, with the kingdom, the United Arab Emirates and Russia moving to increase oil output by several million barrels per day.

The World Health Organisation (WHO) declared the new coronavirus outbreak a pandemic on 11 March, after the number of people infected had increased 13-fold in the previous two weeks.

As of 18 March, the COVID-19 has affected people in more than 150 countries, over 191,100 have been infected and more than 7,800 people have died so far, according to the WHO.

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