Oil prices witnessed a historically sharp decline after Saudi Arabia reduced the prices of its crude oil, thus starting a price war against Russia.
Oil prices in the United States of America fell by up to 27%, to their lowest levels in 4 years, with the price of a barrel reaching $30, while traders are preparing for Saudi Arabia to flood the market with crude oil in an attempt to regain its market share.
Crude oil was recently trading up 22%, with the price of a barrel reaching $32. Brent crude, the global index, also fell by 22%, bringing the price of a barrel to $35. According to Refinitiv, oil futures are heading towards their worst day since 1991.
This market turmoil comes after the collapse of the oil alliance between OPEC and Russia, as the Organization of the Petroleum Exporting Countries (OPEC), led by the Kingdom of Saudi Arabia, had proposed to Russia an additional reduction in daily oil production, with the aim of stopping the decline in oil prices following the decline in global demand, especially from China with the spread of the Corona virus, but Russia rejected the proposal and the two parties did not reach an agreement.
The failure of the meeting between OPEC and Russia led to a shock in the oil industry, causing oil prices to fall by 10%. Oil prices have been stuck in a bear market for some time following the outbreak of the Corona virus, which caused a sharp decline in demand for crude oil.