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How COVID-19 Triggered The Mother Of All Oil Crises

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Marine • 12 days 72.62 -0.13 -0.18% Murban • 12 days 73.78 +0.19 +0.26% Iran Heavy • 12 days 69.70 -0.10 -0.14% Basra Light • 12 days 75.51 +0.45 +0.60% Saharan Blend • 12 days 74.12 -0.24 -0.32% Bonny Light • 12 days 74.16 -0.45 -0.60% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Bonny Light • 12 days 74.16 -0.45 -0.60% Girassol • 12 days 74.45 -0.32 -0.43% Opec Basket • 4 days 71.97 -1.61 -2.19% Click Here for 150+ Global Oil Prices

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Canadian Crude Index • 3 days 59.72 +1.39 +2.38% Western Canadian Select • 2 days 59.99 +0.59 +0.99% Canadian Condensate • 3 days 71.94 +0.74 +1.04% Premium Synthetic • 3 days 73.34 +0.74 +1.02% Sweet Crude • 2 days 69.64 +0.74 +1.07% Peace Sour • 2 days 67.19 +0.74 +1.11% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Peace Sour • 2 days 67.19 +0.74 +1.11% Light Sour Blend • 2 days 69.59 +0.74 +1.07% Syncrude Sweet Premium • 2 days 71.49 +0.74 +1.05% Central Alberta • 2 days 67.54 +0.74 +1.11% Click Here for 150+ Global Oil Prices

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Louisiana Light • 4 days 73.73 +0.76 +1.04% Domestic Swt. @ Cushing • 3 days 71.00 +1.75 +2.53% Giddings • 3 days 64.75 +1.75 +2.78% ANS West Coast • 1 min 73.92 -1.31 -1.74% West Texas Sour • 4 days 66.89 -0.43 -0.64% Eagle Ford • 4 days 70.84 -0.43 -0.60% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Eagle Ford • 4 days 70.84 -0.43 -0.60% Oklahoma Sweet • 3 days 71.00 +1.75 +2.53% Kansas Common • 4 days 63.25 +0.75 +1.20% Buena Vista • 4 days 77.03 +0.74 +0.97% Click Here for 150+ Global Oil Prices

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1D 1M 3M 1Y All Charts Products Discussion Headlines 2 days Brazil Plans To Be 5th-Largest Crude Exporter By 2030 2 days Canada’s Oil Sands Need $60 Billion To Achieve Net-Zero Emissions 2 days Angola Kicks Oil Privatization Into Overdrive 2 days Nio Plans 4,000 Battery-Swapping Stations By 2025 2 days U.S., Colombian ‘Hit Squad’ Assassinated Haiti’s President 3 days India’s New Oil Minister To Focus On Boosting Production 3 days $70 Oil Isn’t Enough To Stabilize Iraq Right Now: Moody’s 3 days Argentina To Sanction Oil Firms Drilling Off Disputed Falklands 3 days Hydrogen Wars: The UAE And Saudi Arabia Are Battling For Dominance 3 days Senior U.S. And Saudi Officials Meet Amid OPEC+ Impasse 3 days US Embassy Targeted On Third Day Of Attacks in Iraq 4 days Ship Explosion Rocks Dubai Port 4 days API Reports Seventh Straight Inventory Draw 4 days China’s Crude Imports Jumped Nearly 9% In June 4 days U.S. Shale Races To Hedge Production Amid OPEC+ Uncertainty 4 days U.S. Fossil Fuel Consumption Plunged Most On Record In 2020 4 days The EU Proposes To Exempt Private Jets From Fuel Tax 4 days Haiti’s President Assassinated As Violence Escalates 4 days Brexit Britain Begins To Scrap EU Trade Quotas 4 days Tensions In Iraq Continue To Escalate Following Another Rocket Attack 5 days Oil Pipeline Explosion Kills 3 In Iran 5 days Baltic States Cut Energy Imports from Russia, Belarus 5 days Israel’s Sovereign Wealth Fund Plans Get Postponed 5 days Lebanon PM Warns Of “Social Explosion” After Fuel Price Hikes 5 days Natural Gas Prices Fall Despite Bullish Outlook 5 days Soaring Fuel Prices In Lebanon Could Trigger A ‘Social Explosion’ 5 days Scottish Electric Firm To Pledge $5.5 Billion In Net-Zero Push 5 days Rockets Target U.S. Troops As Iraqi Militia Leader Vows Revenge 5 days Energy Stocks Fall Following OPEC+ Failure 5 days DiDi Plummets 22% After China Moves To Block The App 5 days Iran Accuses Israel Of Nuclear Site Attack 6 days Oman State Oil Firm Looks To Raise $1.5B From Debt Financing 6 days Iraq Confirms BPs Plans To Leave The Country 6 days Mud Volcano Explosion Near Major Caspian Sea Gas Fields 6 days Climate Activists Furious As Gas Leak Sets Sea On Fire 6 days European Bank For Reconstruction And Development Ends All Upstream Oil Financing 9 days Swiss Court Slaps $1.5M Bribery Fine On Gaddafi-Era Oil Minister’s Son 9 days Lebanon Calls In Military Amid Violence Gas Price Protests 9 days Refinery Explosion In Romania Leaves 1 Dead, Five Injured 9 days Venezuelan Crude Exports Soar 66% Year-On-Year 3 minutes Tesla is the Most American Made Car! 7 minutes Should the US government be on the hook for $15 billion? 11 minutes Forecasts for oil stocks. 11 mins GREEN NEW DEAL = BLIZZARD OF LIES 14 hours U.S. Presidential Elections Status – Electoral Votes 2 hours Electric cars may make driving too expensive for middle classes, warns Vauxhall chief 1 day CCS: Carbon capturing and storage – the ground realities do not look promising Sell Buy Sell Buy Sell Buy Sell Buy Sell Buy Breaking News: Brazil Plans To Be 5th-Largest Crude Exporter By 2030

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Home Energy Crude Oil Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Share Facebook Twitter Linkedin Reddit Premium Content How COVID-19 Triggered The Mother Of All Oil Crises By Haley Zaremba – Jul 11, 2021, 12:00 PM CDT Join Our Community The COVID-19 pandemic certainly wasn’t the first historic crash or economic crisis for the oil and gas industry, and it (probably) won’t be the last. Four huge historic oil crises come to mind immediately: the 1980s oil glut which followed the gas lines of the ‘70s, the turmoil of the Gulf War, the 2008 financial crisis, and the ensuing oil glut of the 2010s. The only thing that’s consistent about oil markets is their very volatility. It’s a boom-and-bust business by nature. And yet, somehow, this time it’s different.  Oil markets and the energy industry as a whole have been hit by all kinds of crises and disasters in the last century. There was the Suez Canal crisis of the ‘50s, in which Egypt nationalized the pivotal waterway which controlled two-thirds of the oil used by Europe at the time of the conflict. The oil embargo of 1973 , in which Arab members of OPEC imposed an embargo on the United States for their involvement in the Arab-Israeli War, leading to those aforementioned gas lines and gas rationing. Then the Iranian revolution caused the second global oil shock in 5 years, leaving consumers stuck in oil lines once again. But, according to oil giant BP, all of these momentous and market-changing moments “pale in comparison” to the havoc wreaked by the novel coronavirus pandemic. 

Related: Oil Price Plunge Continues Amid OPEC+ Deadlock The supermajor oil company released its annual Statistical Review of World Energy on Thursday, and the document compiled data from the past year which led the company to describe 2020 as “a year like no other” with left indelible marks on the energy industry as a whole. The pandemic has led to the loss of 4 million lives at the very least, and those numbers continue to rise, with the number of reported cases (and scores more of unreported ones) totalling to well over 185 million. The economic toll has also been enormous, with global gross domestic product contracting around 3.3 percent in 2020 —  “the largest peacetime recession since the Great Depression,” according to reporting from CNBC

While the pandemic has left a lasting mark on nearly every industry and economic sector out there, few have been as hard-hit and re-shaped as the energy industry. 2020 started off with a huge drop in global oil demand as industrial sectors around the world slowed down or closed down, and cars sat idle in driveways as people retreated inside to shelter in place. This oil market volatility soon led to a spat between the OPEC+ members of Saudi Arabia and Russia as to how to respond to the challenge, which devolved into an all-out oil-price war and severe supply glut which put global oil storage at capacity and made owning oil a liability — so much so that on April 20, 2020, the unthinkable happened and oil prices went negative . The West Texas Intermediate crude benchmark plummeted well below zero, bottoming out at nearly negative $40 per barrel, a historic first which would leave waves in the global oil market that are still reverberating today. 

Related: U.S. Shale On Track For One Of Its Best Years Ever

But the massive change in global oil demand and industrial activity also had huge positive externalities. In their report, BP notes that the 2020 global health crisis resulted in falling rates of primary energy and carbon emissions at levels that we haven’t seen since World War II. World energy demand is estimated to have dropped by a whopping 4.5 percent and worldwide carbon emissions resulting from energy use contracted by 6.3 percent — massive changes by any historical measure. 

A new, greener world seemed possible and the clean energy transition was catalyzed as green energy had a gangbusters year and world leaders in all corners of the globe got serious about meeting emissions goals and working renewables and energy efficiency into their economic recovery packages. Solar power had its biggest growth year ever, and as a whole the renewable energy sector emerged from the pandemic’s economic turmoil “relatively unscathed.”

Some of that hope, however, that the pandemic would provide enough perspective and enough of a break in the momentum of industry and status quo to seriously change the trajectory of global greenhouse gas emissions and global warming, is falling away as the world rather hastily returns to business as usual. While the hope of the green revolution is fading, however, it’s more urgent than ever before. Hopefully it won’t take another taste of the end of days to bring back the human energy needed to power the clean energy revolution. 

By Haley Zaremba for Oilprice.com

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