To its lowest in 4 years brant crude dropped below 30 us dollars a barrel on monday Global Demand for oil was already low since governments imposed widespread lock downs and airlines grounded flights because of the disease they were cartel opec and the International Energy agency both warn that developing countries such as algeria angola and venezuela could suffer the most losing up to 85 percent of the oil and gas revenue this year. Or the price war started last week when russia rejected plans by saudi arabia to cut Oil Production the kingdom and other opec countries want Higher Oil Prices following the drastic drop in demand because of a coronavirus pandemic saudi arabia responded by announcing plans to pump much more oil at hugely discounted prices last monday brant crude recorded its biggest one day price fall since the 1991 gulf war Investment Firm goldman sachs. Warns prices could fall to 20. 00 a barrel both the saudis and russians say they can survive the price crash by relying on their foreign reserves of around 500000000000. 00 each but experts say Saudi Arabia Needs Oil prices at around 82. 00 a barrel to balance its budget russia needs around half that. Now lets bring in our panel joining us from ban in switzerland canadian mire an economist and c. E. O. Of my resource which is a specialist consultancy on oil and gas from london mamdouh salami an International Economist and visiting professor of energy cannot mix at your Business School and from providence in rhode island jeff colgan associate professor of Political Science at Brown University welcome to your starting off with you Cornelia Meyer just take us back to the origins of this why is saudi arabia doing this well as you might recall there was an ok meeting opec last meeting opec last 10 allied nations led by russia even under 6 of march and saudi arabia had pushed very hard opec passed has balanced the market for the last in strength to 16 pretty accurately putting on oil in need of taking off oil when needed and the saudis saw how dire the situation wasnt going to take and other 1500000 barrels a day off tomorrow could come koolaid with a 2100000 barrels they have taken before. But the russians would not play ball and saudis said look we are were not always going we almost take the brunt of it but we cant do this alone so what happened to stand overnight we came from a situation where opec brass was balancing the market to a situation where we had a war for market share between saudi russia and all sorts of other people and you know combined with that demand was anemic to start it was combined with the disaster of the coronado direst this is the perfect storm in the oil markets. Do you think were any closer to any of these sides changing their minds i mean the coronavirus have as happened in the meantime. Could we could we come back from this you think well this is really a story in 3 stages right because the coronavirus hit asian demand came in february then we saw the collapse of negotiations in opec plus principally between saudi arabia and russia but the 3rd part of the story is really whats going to happen to demand for oil in the United States and in europe over the next few months as coronavirus bites in those markets as well and so its possible that we could see Oil Prices Drop even further down into the twentys or even in the teens because were getting a combination of both a demand shock and a supply shock at the same time professor. In your view to saudi arabia whats that kind of the gamble for them is that they can ride this out is that a gamble that you think is sensible for them at this at this stage and you think were going to have to revisit it in the current climate prove the biggest gamble in their lives and it could bankrupt the saudi economy not a man but in 24. 00 of the team yes i would be happy again to move. The other one or the market with all of them in defense of its market share. Pregnancy through completely and. With his answer how would anyone who has forced to do this their. Psyche and to come back to russia and where some of them i did name it what became as you put it best team thoughts which if they still patient now this time saudi king of this has. Leaked we too will plenty for now just south america. Cannot slap the little. As it did in plenty for he. Does not have the capacity to produce. It is talking about. All of that and if he implements. Them very. Little. In the future this is going to be a sergeant trapeze artist according to my looks like you might disagree with with the point that saudi arabia if you think they can actually write it out you think its not so much of a gamble i mean look at the low cost producer and always when you have to use when you have to use epic moments its always the lowest cost producer you can write it out but it comes at a humongous cost and i think whatever could you see now it can produce. A better what it would raise for me when i saw course of slashing its cap ex its Capital Expenditure by about 25 percent and lets not forget saudi. About 12 to 14000000000 a year just to maintain production because you know when you have to climb in fields you need to put capeks in there to maintain production at a certain level so i get it can be a lot but i think its going to be extremely costly to the country to call them that human clearly one of the in intentions i suppose of origine of russian and saudi arabia was to perhaps hurt the u. S. Shale industry what are what are they feeling at the moment from this. But youre exactly right that the United States oil sector was the principal target of this regardless of what russia saudi or arabia would say on it and theres no question theres a lot of pain in the Us Oil Sector you have republican senators writing to the king of saudi arabia asking the country to change its course and to intervene in a different way in the oil sector i dont expect that. To be successful but its remarkable how you know just a few months ago president talk trump was talking about the United StatesEnergy Dominance in the Global Markets and now things are really a different story and it reveals how president trumps claim was pretty much an allusion the whole way along. The president is it your view that this can go to continue to go further whats your kind of estimate of how know the prices could go as long as the us to leave on 10 years we cannot keep the home ice you want to rise can decline iran have on a sled that would be going well in market as saudi arabia is says jesting. I love that however if you know. What i shall know i was absolutely right. He gave all of the thoughts by i think last because its human rights that any good thinking of that thats what i mean with thats what. Theyre doing it really have no plans to impact brands as well as you call them a violinist was going to kill you im going to present an ashtray i can send her i was in a warehouse and cant live with them. Am proudest of 25. 00 below or less for when he wins as president putin has done however south of that. And ill settle minimum. Price of it is 5 levels my research. Actually is the 100. 00 events but the international Britannia Fund less than he said it was in the room who plan to balance a little south of the ram remember last summer 75. 00 brand new france of rest of the oppressor in january are such sweet land it is 30 sort of sound and he. Will remember who the browns were against sasha can never have a flat below market will bear think its not a. Venture not the bankruptcy of the south corp going to them are just that want to kind of go to the kind of the consequences for because normally in these situations you consumers might benefit from oil prices and so on but at this time its its very different isnt it because the airline industrys been hit expect just the kind of the impact that this has in a coming totally changed world this is this is i mean unprecedented times and it is worse than the Great Depression because at least in the Great Depression a president whos world could throw money at the problem and get people employed now nobody can get employed nobody can go to work as i was as i was waiting to come on with you all scream just sent me a note saying that all we suspending flies from to morrow through through march 28th so its its its starting its unprecedented and im always very skeptical when people tell me well how much saudi the saudi budget can. Taking the normal question how much it cant because its very hard to really its a lot of work of a saudi budget its very hard to really express adelaide because you dont we dont have all the data points but it is clear there are despoil and there are no winners in this and when where do we pump more oil why do we pump less oil the oil price will go down i would not totally discount the shale my kid go in for when we break yes there will be a lot of bankruptcies but in the doing to last the last downturn in 2418. 00 which the professor mentioned the Oil Companies the shale oil space became muscle mass 2. 7 percent more productive productive to get activity increased so they will come back what youll see is a lot of a lot of bankruptcies and some of the Big Companies the shells exxons snapping up things for a song so i would not discount them when we come back just call them what you want your view i mean is there any kind of upside for consumers say from lower prices or from perhaps if chinas coming out the other side of the great advice after that it can help it. Start to restart the engines of growth or do we still in a completely negative picture here. You know i think there are some upsides on balance i agree that the picture is overall negative especially because the Oil Price Fall is coming at a time when stock markets around the world were already so vulnerable but in the medium term the fact that oil prices have fallen and fuel costs transportation costs for businesses around the world are falling thats going to help businesses everyone everything from say amazon delivering packages to your front door to airlines to to you name it those businesses are going to benefit from Lower Oil Prices particularly if we see as was suggested so consolidation in the oil sector in north america and i expect that there will be quite a bit of movement in the shale sector and in fact even in the conventional Oil Production in north america is probably going to get largely affected as well but ultimately it is correct that its not like the oil sector is going to be completely wiped out here there will be a rebound over time and understand to me do you agree with that perspective not having them take the sort of. Service you would be glad to put asses with that you think much. Of the little. Net homes and let them have to use that then you think 2nd. Chances or lot of best. Plan by the tsunami that. All impressed you class because governments were dressed in. China. That some of them sense some of that i remember when they took them to a battle in the u. S. Branches nobody. You know when he had a bad set of consensus. Passes. As well he thought i was in the usa many professions but plan with the cuban economy higher prices and i have the 3rd of the price is one of the top of that and plenty of others and i really hate the guy who thought im what is. Chungs the if that was. Your single nations september. 11th thats the. Best months of the world. As we have seen them plenty for our a very good and the better mind by a weekend of gordon brown ok just a hazard of a step ahead just to bring in. Corner him are just want to ask you which of the countries are most at risk from lower prices took us through i mean countries like iraq where where do you see the biggest hit from this kind of a shock certainly iraq etc. Just come out there like smaller countries like ours and buy into and i dont see how they can winter storm the country states are smaller and if you research. Ethics reserves and are totally depend for their economies on their oil exports they are most at risk but you know when you look at it in terms of benefiting anybody how can it benefit anybody anybody in the economy that you know the question will be how Many Airlines will we have left after. Just going to say us pessimistic is that you think we were left with no actually no airlines. Well i think i mean in general all 3 of us are saying that this is going to be a negative shock for some time and in fact the longer that there is a quarantine and a lockdown of fact coming from the corona virus the harder it is for the benefit of low fuel prices to translate to the wider economy but it is not all doom and gloom and i think that the medium term effects of this are in fact real the question that we havent talked about yet i mean theres 2 things really one is that i think in terms of countries that are hit hardest by this its probably those that are in africa right so nigeria algeria and goal those countries are heavily dependent in terms of their government revenues on oil prices and theyre going to struggle so we may see very significant effects in africa but the other thing that we need to think about is Climate Change and how this becomes an important part of the story for the Energy Transition towards renewals that was already going on now were moving into a world where we could see Lower Oil Prices for quite some time and thats going to affect the investor prospect and enthusiasm for technologies like car batteries and electric cars under saddam a on that issue of africa being one of the west hit areas what kind of remedies the governments have that has and many of them do it rely on the revenue from oil to to fund kind of Health Services and so on. And france is and ive said it is bad of the economy that he was. In this courtroom as all of us and he asked education of the right school. Is he doing anything to me as i mentioned them we have to give everybody kind of when they add a. Sense is the economy are sound. They continue with this one and this set them. Naturally i want them to this and im going to put you in the sense. So i dont. Leave any kind of mr president that even. Have several in its just going to sort of bring you back you know i mean how where do you see any kind of potential kind of climb down because these are saudi arabia russia india big big powers that want to these face what what would be the scenario where they could say actually weve changed our minds and we might adjust our policy on this can you can imagine a scenario that yeah its going to take some months for that to play out i think and i dont expect to see it anytime in the short term but the probably the brightest prospect and to the extent that it is possible the bread is prospect is if there is Significant Movement in the u. S. Oil sector right so thats been the target from day one and if we start to see a significant number of either bankruptcies or mergers and acquisitions. And sort of Weaker Companies being bought out by the stronger ones thats where were going to see ok russia and saudi arabia might start to see that theyve theyve had the impact that they want to have and only then would they start to consider ok is demand starting to rise after the coronavirus shock so with those 2 factors in place rising demand and consolidation in the u. S. Oil sector then you might start to see saudi arabia and russia come back to the bargaining table and talk again canadian what do you think it will take to get russia and saudi every back to the table. I think if it gets a lot worse russia and saudi arabia will come back to the table i think where saudi arabia just put a stake in the ground is if they say that we have taken the brunt of all the cuts we have suffered in terms of market share we cannot do this alone and russia for its own internal reasons. Didnt play ball this time and when it gets too bad and we had hits russia too high they will do it too i think theres also lets not forget this also to keep 20 both saudi saudi and the presidency of the cheap 20 right now russia is in the cheap 20 so we have all the Major Players in the g. 20 so so so something sad some stage they might get to get it and i just have a board of caution on oh its a good day when they see too much pain. In the shale space you know when you have constantly day should to begin players will snap them up and they will be able to use the scope and the scale of the corporation of an excellent a Formidable Force of a shell so watch that space when things you know rebound shale may come back right significantly and it would not be deferred this time that we are supported by which i can do ok munda salami what do you think it will take to have these players resolve their differences and perhaps ease things a bit. Saudi economy would settle for selling. Its necklace decision to allow them to password. And truly stamp and of course that he she and weve had some of that. Sound that he. Runs that is its not that russia has demands that you just let your set of groups or havent. You done well in markets that you still. Havent read or the us should only investment is in pursuit. Of so much. More not that we can. Invest and keep saving from collapse difficult very briefly who has influenced the saudi rulers to make them change their minds anybody well i think actually the more interesting story politically is in russia right to russia is obviously going to suffer with Lower Oil Prices and Vladimir Putin his own popularity has dropped considerably in the last couple of years so it may be the dissatisfaction economically within russia that puts russia back onto into the sort of negotiating realm and then saudi