These days’ coronavirus is affecting the world economy very severely. Due to this, there is a massive fall in demand for crude oil. Moreover, there is a trade war going on between Saudi Arabia and Russia over crude oil prices.
All this started as Russia denied reducing production as per the agreement. This war is turning profitable to other countries that import crude oil on a large scale like India, China, European countries, Japan, etc. India is among the largest importer of crude oil in the world.
There is less demand due to lockdown in many countries. Still, many countries want to make a profit due to these clashes between Saudi Arabia and Russia over crude oil. All countries are importing crude oil and storing it for future consumption. Due to price war, crude oil production will be lifted till the year-end. Less demand and high import because of less price of crude oil will make storage tankers full till mid of the year.
Analysts warned: Coronavirus impact is extremely bad for commodities, especially Crude Oil. It is sending crude oil prices to 20 years of low prices. Crude oil per barrel is trading around 20 dollars per barrel.
Refineries are also getting profoundly impacted due to a sharp decrease in the price of crude oil. As refineries are also running out of profit as they are making a loss on every barrel, they are processing. Shutting down refineries will make the situation worst as they are an essential part of the chain to send crude oil to the market.