Oil prices in world markets have fallen to about $20 a barrel, the lowest level in the past two decades.

The sharp decline in oil prices is attributed to the spread of Corona virus (Covid-19) and the consequent decline in global oil demand. The dispute between the major producers, Russia and Saudi Arabia, led to the end of the OPEC conference last month without reaching an agreement within the OPEC + group to radically reduce production to face the situation, and this led to a further collapse of oil prices.

According to Reuter’s news agency, US President Donald Trump said on Sunday 5 April 2020 that he may be forced to impose high customs duties on oil imports to the United States in case of a continuing decline in oil prices.

This statement comes within the framework of the US government’s efforts to protect shale oil companies in the United States, some of which are close to bankruptcy due to the oil price deterioration to levels that cannot cover the high production costs of these companies.

There is a high probability that many exploration and production companies will go bankrupt in the next two years due to the drop in oil prices. This may be accompanied by the entry of the world economy into an economic recession.

The world oil market is expected to remain turbulent as long as the declared confrontation and price war between the world’s major oil producers (Russia and Saudi Arabia) remains. There are efforts to bridge the divergent views between the two countries in order to preserve the common interests of OPEC + countries.

It is more likely that the OPEC group will return to meet within days to decide the start of a radical reduction in oil production from the countries of the group of at least 10 million barrels per day, so that it can absorb the excess supplies from the markets to stimulate prices to rise.