G20 oil ministers are expected to have an emergency meeting on Friday this week following appeals from Saudi Arabia and the International Energy Agency to seek support for a sector weakened by the COVID-19 pandemic.
The meeting will be the first time that the G20 will meet to exclusively discuss energy challenges and strong concern about the oil crisis. With millions of jobs and the future of the world economy at stake, Friday’s meeting seeks to find a way to safeguard oil prices from turmoil.
“There is a huge structural excess supply in the oil markets caused by the coronavirus crisis,” said International Energy Agency Chief, Fatih Birol. “It is reaching a level where it will have important implications for the stability of the global economy and the millions of workers employed in the oil and gas industry. The main task [of the G20] is to provide and maintain the financial and economic stability of world markets so that it is fully in line with their mission.”
Global demand for oil has diminished by more than a quarter, with countries across the world halting flights and placing in effect restrictions to combat the coronavirus. This has contributed to a market crash that threatens to cripple the global economy. Brent crude hit a 20-year low last week, before increasing to more than $30 in anticipation that an agreement will be struck between producers.
Large G20 oil producers – which include the United States, Canada, Saudi Arabia, Russia and Brazil – are expected to consider cutting production of at least 25 million barrels per day.