1

The Effect of the Pandemic on the Price

of Crude Oil

Jerus Kiev S. Gastador

STEM 12- INTEGRITY
The Impact of Covid-19 to Price of Crude Oil

Abstract
The double blow of Coronavirus (COVID-19) and the oil price shock is hitting oil-exporting
developing countries particularly hard at a time when the fossil fuel industry is facing a process
of structural decline. Although some countries might weather the current crisis on the back of
sovereign wealth funds or relatively low public debt levels, this will not be the case for the
majority of fragile oil-exporting countries, many of which are resource dependent and were
already grappling with high levels of debt and multifaceted economic and social fragility before
the present crisis. Some countries may find themselves entering a spiral of unsustainable
borrowing on the back of the current turmoil, as oil-exporting developing countries have
experienced an increased reliance on short-term and expensive non-concessional private
borrowing in recent years, a significant proportion of which is backed by oil collateral. A timely
and coherent response is needed, encompassing both concessional lenders and private financiers,
to create fiscal space in oil-exporting developing countries, reduce the risks of unsustainable
debt, corruption and illicit financial flows (IFFs), and catalyse a transition to a cleaner and more
sustainable future.
The Impact of Covid-19 to Price of Crude Oil

Introduction
The oil sector is vital in Saudi Arabia, and it has major spillovers into other service industries
such as travel, business, information technology, and religious tourism. The drop in oil prices
will have little impact on export revenues since oil output is stable due to a favorable regulatory
structure. Because oil prices are a precise driver of inflation, a drop in oil prices will have a
favorable influence on the consumer price index, with the most important consequence being a
drop in investment. The economic chaos of Covid-19 resulted in significant drops in energy
consumption and prices, notably for oil and industrial metals. Financial instability, investments,
and growth in the production and export of oil and gas may be hampered by commodity price
declines.

.
Long Term Effect of Covid-19 to Oil Price
The COVID-19 epidemic wreaked havoc on nations that export commodities with
fluctuating pricing. Even in the relatively rich but hydrocarbon-dependent Gulf Cooperation
Council (GCC) governments, the consequences have been obvious. Despite their differences,
GCC governments were hit hard by the epidemic, which included enlarged economic stimulus
measures as well as a significant decline in oil export earnings and government budgets.

The Dual shock to GCC countries

The Gulf Cooperation Council (GCC) countries are dealing with a double whammy: the COVID-
19 epidemic and decreasing oil prices. The epidemic is wreaking havoc on people's lives. The
essential containment measures are having a negative impact on the global economy and
commerce, with major ramifications for the GCC nations that rely heavily on imports. As a
result, supply-side challenges and global value-chain interruptions are causing production issues
in GCC economies. Demand patterns are shifting, with total demand declining. The rate of
production and productivity is decreasing.
The Impact of Covid-19 to Price of Crude Oil

Methodology
Research Design

This research is a qualitative and case study because the collection of data such
as the Effect of the Epidemic on the Price of Crude Oil and Price of Oil throughout 2016
- 2021. This study documents the results of the researcher compiling of data throughout
the time of the epidemic and comparative effect of other events to the Pandemic on the
price of crude oil. On the other hand, the results of the compiling of Data from the
internet and in the stock price of crude oil. The researcher ensured that this study meets
its purpose and can be give a way of reducing the price of crude oil.
The Impact of Covid-19 to Price of Crude Oil

Tables
Table 1
Price of Crude Oil from January 2016- December 2021
Year January May September December
2016 $39.57 $57.01 $55.72 $62.05
2017 $60.63 $55.04 $58.39 $68.34
2018 $72.82 $74.28 $80.87 $50.41
2019 $59.60 $58.26 $58.72 $66.25
2020 $55.74 $38.58 $43.08 $51.92
2021 $55.65 $68.71 $76.23 $75.21
The Impact of Covid-19 to Price of Crude Oil

Price of Crude Oil Per Barrel

The Impact of Covid-19 to Price of Crude Oil

Reference
https://www.macrotrends.net/1369/crude-oil-price-history-chart
https://www.frontiersin.org/articles/10.3389/fpubh.2021.620875/full
https://www.sciencedirect.com/science/article/pii/S221256711500800X

https://www.frontiersin.org/articles/10.3389/fpubh.2021.620875/full
https://www.strategyand.pwc.com/m1/en/covid-19-oil-price-drop-gcc.html
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