Oil price dip of 2020

[TREND 11] Oil Price Dip of 2020

Oil price dip of 2020

Historically plummeting crude oil prices affected large oil exporting countries, notably Saudi Arabia, which has experienced an unprecedented double hit. The country has been affected by the COVID-19 shutdowns as well as by even lower oil prices as the world closed down.

This, however, could be an opportunity for the country and other oil exporting countries to start the transition to low carbon and diversifying their industries. Most countries in the Middle East region are already enhancing their industrial sector to change from being oil-driven economies to one driven by manufacturing, trading, production, and mining. This shift in focus will drive growth in the lubricants consumed by the industrial segment. This will also drive the need for more commercial vehicles, helping to drive commercial lubricants consumption growth until 2024.

On the global scale and in normal times, the low oil prices would bring a positive effect on the global economy. This is because lower oil prices benefit the manufacturing sector by reducing the costs for the manufacturing and transport. This reduction of costs could be passed on to the consumer.

With the COVID-19 outbreak, however, there is little hope that consumers will substantially increase their traveling and spending plans.

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