The headquarters of Saudi Arabia’s mostly state-owned Aramco oil company in Dharhan. (Wikimedia Commons)

OPEC Holds ‘Virtual’ Crisis Talks as Prices Plummet

Members of OPEC (the Organization of Petroleum Exporting Countries) have held “virtual” crisis talks in a bid to stabilize global oil markets after the cost of a barrel of Brent crude, the international benchmark, plummeted to the lowest prices in two decades. This follows the May futures price of West Texas Intermediate (WTI), the US benchmark, which plunged to a record-low of minus $35 per barrel, meaning that American oil companies will have to pay that price to people holding the contracts if they accept the product next month. On Tuesday, WTI contracts for June cratered 30%, to less than $15 per barrel, although analysts believe the price is not a true reflection of the actual market value. In response, President Donald Trump tweeted: “I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important [oil and gas] companies and jobs will be secured long into the future!” For its part, Saudi Arabia vowed to “closely monitor the situation” and expressed a willingness to “take any additional measures in cooperation with OPEC+ and other producers.” While countries this month agreed to cut production, the measure was apparently too little, too late. The coronavirus pandemic has effectively destroyed demand for oil at a time when Riyadh was already engaged in a price war with Russia and had flooded markets with excess product.

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