The talk of discussions between OPEC, the Organization of Petroleum Exporting Countries, of a deal has steadied the crude market, but Saudi Arabian pronouncements of boosting production to 13m barrels a day could start a prolonged price war say experts.
Analysts within the oi market believe that Saudi Arabia is declaring a price war on its partners in oil production with a view to protecting its market share and forcing the hand of the heavily indebted shale gas industry.
Even so the price of crude, which is mirrored by the price of bunkers, steadied today with the cost of all types of bunker fuel, in almost all regions, gaining in price, on the world index by US$1.95/tonne for HFO and US$5/tonne for VLSFO.
With demand already hit by the trade war between the US and China, the Coronavirus stymied any sort of economic recovery and the price of oil, while it could stimulate growth, could have a detrimental effect on the low carbon industry.
Oil prices hit a low of US$31.02/bbl on Monday from around US$59/bbl in mid-February, but prices have since regained around US$5/bbl. However, Russia the non-OPEC country in alliance with the organisation for the last four years to restrain production, is now also looking at raising its production, possibly deepening the price war.
