DECRYPTION
After weeks of freefall, the price of a barrel of oil on the New York market fell below the 0 dollar mark on Monday. The market is saturated and investors were looking to get rid of it at all costs. On some contracts, it even fell to -37 dollars. Clearly, those who own the oil no longer sell it. On the contrary: they pay to avoid having to store it.
The price went up overnight, but the problems remain: overproduction and excessively large stocks which no longer run out, due to the coronavirus pandemic. Is the situation that bad? We asked Francis Perrin, director of research at Iris (Institute of International and Strategic Relations). According to him, these negative rates are an isolated event that should not be dramatized. But for some countries, the situation is no less worrying ...
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Circumstances and a particular place
Barrel prices at -37 euros, should we worry? "It happened on the New York market. It was not the average price of oil which around the world yesterday was between 18 and 25 dollars per barrel", nuance Francis Perrin. "But in very specific circumstances, in a very particular place, producers could not find buyers and no longer had facilities to store this oil. Consequently, they preferred to pay actors so that they get rid of their oil. "
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But if the fall in prices on the New York market remains an exceptional and targeted phenomenon, the prices of "black gold" around the world have been falling for months. "If we take the price of Brent oil, from the North Sea, one of the main reference prices around the world, we were at 68 dollars per barrel on January 6 and Monday we were between 25.26 dollars per barrel , in London ", analyzes Francis Perrin. "A drop of 40 dollars per barrel since the beginning of the year hurts a lot when you are a country dependent on oil revenues."
Exporting countries destabilized
And according to him, some countries could be largely destabilized by the fall in oil prices, in particular the poorest exporting countries: Iraq, Iran, Venezuela, Nigeria, Libya, Algeria, Angola ...
"On the other hand, petro-monarchies have very large financial reserves", he finally underlines. Before concluding: "These countries are in the process of 'drinking the broth', but they will draw on their reserves. They are backing up while waiting for prices to go up, which should happen in the second half of 2020".