The crash in oil prices can spell disaster for small producing nations but consumers won't have much to cheer about either
As if things weren’t already bad enough with the coronavirus pandemic and a slowing global economy, a sharp drop in the price of oil has made things even worse for some countries.
After failing to reach an agreement with Russia last week on the question of how to stop the slide in oil prices, Riyadh decided to crash the price by offering discounts to customers and jacking up production. Saudi Arabia and Russia are also trying to inflict losses on shale production, which has helped propel the United States to becoming the world’s leading oil producer.
However, that’s just one side of the story as the government needs a lot more money to run the affairs of the government. The Saudi Crown Prince Mohammad Bin Salman’s ambitious plans to reduce reliance on oil by attracting foreign investments and creating jobs for the youth has yet to take off. Russia is in a better financial position than Saudi Arabia to withstand the impact. Moscow says it can survive oil prices in the range of $25-$30 per barrel for six to 10 years.
In recent years, whenever Turkey has faced issues with the balance of payments - the difference between how much money comes in the country against how much goes out - energy imports have had a role to play in it.
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