Saudi Arabia Hosts Extraordinary Meeting of G20 Energy Ministers
The COVID-19 pandemic, which the entire world is grappling with currently, has led to unprecedented circumstances all across the globe. The global economy is steadily sliding downwards with all economic activities coming to a standstill amid rising number of cases across countries and the resultant fatalities.
Against this backdrop, the Kingdom of Saudi Arabia, which currently holds the G20’s rotating presidency, recently hosted a virtual extraordinary meeting of the G20 Energy Ministers through video conferencing. It was also attended by some invitees who are not members of G20, heads of international organizations including the Organization of the Petroleum Exporting Countries (OPEC), International Energy Agency, and International Energy Forum. The G20 group includes mega oil producers such as US, Canada, Saudi Arabia, Russia, and Brazil as also large consumers such as China, India, Japan, and South Korea who rely mostly on oil imports.
Global oil demand has fallen as countries around the world have announced lockdowns that grounded flights, halted most other forms of transport, shut factories and took most vehicles off the road, in an effort to combat the pandemic.
The meeting was aimed at discussions and deliberations with regard to finding ways and means to ensure stability of the global oil markets amid the current volatilities and the drastic reduction in demands. It can be said that the meeting achieved some great milestones. The attendees, including US and Mexico, unanimously agreed to cut oil production. This is a significant development as it represents a step that is essential to ensure affordable energy supply which is key to facilitating global economic recovery.
The world’s top oil producing countries came together to finalize a deal on effecting sweeping oil cuts to lift prices slashed by the COVID-19 crisis with Russia and Saudi Arabia making the biggest moves in this direction.
Saudi’s Crown Prince Abdulaziz bin Salman said that access to affordable and reliable energy supply is considered a necessity to enable basic services, including health care. Thus it can help global efforts in assisting economic recovery.
The World Bank estimates that MENA economies could face a $116 billion hit from the coronavirus pandemic, and the resultant unprecedented oil price slump. A stable global oil market which is reasonable for the oil producers and affordable for the consumers is the need of the hour. Therefore, cooperation among all oil producing nations at this critical juncture is important and stability of the global energy market would support growth of global economy.