Crude oil value lost more than 20%, pushing equity indices down in Asia. After the collapse of prices due to the coronavirus, Opec and Russia fail to agree on production levels. Analysts worried about the drop in exports and imports from China, the world's largest oil buyer.
Riyadh (AsiaNews / Agencies) - The oil price has fallen by 20% in Asia today, with the Brent reference reaching 36 dollars a barrel and the WTI at around 33 dollars, dragging the main world stock exchanges down.
The thud is due to the clash between the OPEC cartel countries (led by Saudi Arabia) and Russia on post-coronavirus production levels. OPEC and Russia met on March 6 to address the problem, without however finding an agreement.
The drop in global demand, caused by the effects of the virus, has led to a constant reduction in the value of crude oil. The excess production, thanks to the boom of "shale oil" in the US, had already hit the sector in recent years. Until the outbreak of the epidemic crisis, an agreement on production between the OPEC countries and the Kremlin, however, had kept prices stable between 50 and 60 dollars a barrel.
Fears of a price war between major world producers pushed Asia's stock indices downward. In the mid-afternoon, Shanghai lost 3%, Hong Kong and Shenzhen more than 4%. Tokyo is about to close with a loss of more than 5%, as well as Bombay. The Kospi in Seoul, on the other hand, lost 4.20%.
The negative trade figures published by Beijing over the weekend are also being felt. In the past two months, Chinese exports have fallen by 17% and imports by 4%. Analysts do not expect a rapid recovery of the economy in China. According to Oxford Economics, the Asian giant's GDP will drop by 2% in the first quarter of 2020.
Beijing is the world's largest buyer of fossil fuels. In 2017, reports the Observatory of Economic Complexity, the Chinese imported oil to the tune of 145 billion dollars (127 billion euros), mainly from Russia and Gulf monarchies. Japan, South Korea and India also depend on the import of crude oil for their industrial production. Tokyo spends around 58 billion dollars (51 billion euros) per year to buy oil products abroad, more or less as much as Seoul; Delhi stands at $ 75 billion a year (€ 66 billion).