This economic conflict which has a significant impact on the actual decrease in oil prices is currently raging between Russia and Saudi Arabia (the leader of OPEC oil cartel). Due to the economic restrictions connected to coronavirus epidemy containment, Saudi wanted to limit, after an agreement with Russia, the oil production levels. However, Russia didn’t agree and Saudi Arabia, therefore, decided to declare a price war.
Saudi immediately started to increase oil production while lowering its price. And how did Russians react? It didn’t take them long to choose the similar tactics. That’s how the price war began. Due to this war, the market was overly saturated with crude oil in a way analytics don’t remember. In reality, it means that crude oil supply hugely overlaps its demand which consequently brings the prices down with an unbelievable amount. And nobody knows when this will end.