17:54 GMT15 July 2020
Listen Live
    Middle East
    Get short URL
    by
    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (103)
    152
    Subscribe

    Even after members of OPEC+ and other oil-producing countries signed an agreement to cut global crude output, black gold prices have continued to fall, with Brent blend losing almost 7% since the deal was inked.

    Riyadh might resort to selling international bonds in the near future, as its government coffers remain unfilled due to oil prices continuing their fall after the signing of a new OPEC+ deal, Reuters reported, citing several anonymous banking sources. The sources noted that Saudi Arabia will be monitoring the oil markets' reaction to the new output cuts before making a decision on borrowing money.

    "It's the logical next step. They may wait a bit for the oil market to react to the cuts as their name is more closely associated with oil", one of the sources suggested.

    Saudi Arabia has not commented on Reuters' report.

    The reported move might be in the offing, as the kingdom already raised its limits on public debt to 50% GDP from the earlier 30%. The measure was taken as the sharp dive in crude prices, a nearly $30 drop in just two months, started threatening the country's ability to properly fund its budget, which was purportedly designed for much higher prices than the current $30 per barrel.

    Riyadh also made cuts to some of its budget programmes to make certain their funding would continue to be secure under the new circumstances.

     

    A fuel storage tank at the Saudi Aramco Shell oil refinery in Jubail, Saudi Arabia, in this photo taken Tuesday, June 1, 2004
    © AP Photo / HASAN JAMALI
    A fuel storage tank at the Saudi Aramco Shell oil refinery in Jubail, Saudi Arabia, in this photo taken Tuesday, June 1, 2004

     

     

    Black gold prices started falling in February as more and more governments started introducing measures to stop the coronavirus pandemic, putting many businesses on pause, which resulted in the fall of demand for energy resources, specifically petroleum. The situation was furtherer exacerbated by the collapse of the old OPEC+ deal in March and resulting overproduction of oil.

    However, the new OPEC deal signed on 12 April has so far failed to save oil prices, which have fallen by 7% since last week.

    Topic:
    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (103)

    Related:

    Oil Anger: US Senators Threaten Saudi Arabia With Diplomatic Retaliation Amid Price War – Report
    America's Top Oil Rivals Russia and Saudi Arabia May Have Just Saved US Shale: Here's Why
    Saudi Arabia Delays Release of Oil Price Data Again as Mexico Refuses to Yield on Output Cuts
    Putin Holds Separate Telephone Talks on Oil Markets, OPEC+ Deal With Donald Trump, Saudi King Salman
    How Record Global Cuts Brokered by Russia, Saudi Arabia, & US Will Affect Oil Market
    Tags:
    bonds, Debt, oil prices, Oil, Saudi Arabia
    Community standardsDiscussion