Two of the world’s largest oil producers — Saudi Arabia and Russia — are set to increase production dramatically this month, after an agreement between OPEC and its allies to lower output expired at the end of March.
OPEC+ countries have teamed up to reduce their supply to the market since 2017, but failed to reach a deal last month.
Riyadh and Moscow then separately announced that they would flood the market with oil in April. That, against the backdrop of demand destruction due to the global coronavirus pandemic, has crushed oil prices. Crude oil benchmarks plunged to 18-year lows on Tuesday and have fallen more than 60% since the beginning of the year.
Here’s how the oil price war unfolded.
Slide in oil demand
As early as mid-January, the future of oil demand came into question as the coronavirus spread, prompting factory closures and trip cancellations in China. These concerns have now intensified — many countries have gone into lockdowns and air travel has largely been…