Crude oil prices have been battered by both an unprecedented decrease in global oil demand stemming from the COVID-19 pandemic and the outbreak of a price war between Saudi Arabia and Russia. In two months, the price of crude oil fell from $52 per barrel to $20 per barrel–the cheapest its been since the aftermath of the September 11th attacks. In the coming months, we should expect drilling of oil wells in the United States to come nearly to a halt, with layoffs and bankruptcies following, says Harris Public Policy Professor Ryan Kellogg. Kellogg shared his take in a recent USAEE podcast and in Forbes.
Ryan Kellogg joined University of California-Berkeley economist Severin Borenstein to discuss how the sudden downturn in oil demand is affecting suppliers and the politics of oil in the United States. Their conversation is part of the USAEE Podcast Series.
The breakout of competition in the world oil market has been one of the few pieces of good news over what has otherwise been a tragic past month, writes Ryan Kellogg. We should not encourage a return to oil market collusion and market manipulation.