Thread by @hannytalker

This thread is for those who don't understand what led to the oil price crises.

I will explain in the simplest of terms as this is the industry I operate in.

As of last year oil prices rose to the 70s and typically when oil prices rises that high oil producers will be tempted to bring more supply into the market because everyone is trying to take advantage of the high oil prices and make as much revenue(sales) as possible

Producers in many developed economies began to ramp up their production. Russia for example increased their production all the way above 10 million barrels per day, America also, Saudi Arabia in the guise of covering up for Iran who was under a lot of sanctions also ramped up

their production. There was excess oil. The global oil demand could not accommodate all that supply coming into the market so oil prices started to drop. Welcome COVID 19 in December and it started in the largest oil consuming nation(China).

Global demand for oil is around

100 million barrels per day and China consumption alone is around 12-13 million barrels per day. When China started to take the hit from the pandemic. Their economic activities declined and their demand for oil fell. This had a ripple effect on other countries they do business

with. Typically in the oil industry in Q2 refineries start to shut down for maintenance work especially in Europe and Asia. To this end they start buying oil into their storage and demand typically falls. Add this to the pandemic coupled with over supply in the market

there was a need for OPEC to take a decision. They tried to get non OPEC countries into discussion to see if they can cut down on oil production to help prices recover but Russia and Mexico said NO. In a bid to teach Russia a lesson Saudi Arabia dealt a major blow to the industry

They knew that Russia sells the bulk of its oil in Europe so they decided to pump more oil and flood the European market at a major discount. Mind you, Saudi has one of the best light oil in the market. All that excess oil landed in the market and your guess is as good

as mine...there was a crash in the price of oil.

I hope this explained the situation well to you so you can be aware when discussions are made around this topic.

I am still open to helping with your CVs, LinkedIn etc at a fair price.