Historic Slump In Oil Prices and Algerian Government Between Jaws Of Pliers

On Monday, oil prices collapsed in international markets in an unprecedented manner, as black gold lost more than 20 percent of its value with the start of trading on Monday in global stock exchanges.
As a result, it has been the lowest since 2016, and this untoward contingency will put the Algerian government in a very difficult position, especially if the current adverse situation lasts too long.

Observers attributed this sharp decline in prices to the failure of what is known as the “OPEC + alliance” in adopting a new production cut presented last Thursday at the Vienna meeting that included members of OPEC and producers from outside the cartel.

As a result of the Russian rejection of a new proposal to reduce by 1.5 million barrels per day (in addition to the current reduction of 1.7 million barrels per day), Saudi Arabia announced a reduction in the sale of its crude oil for April next month’s deliveries.

And the Asian markets opened to a significant decline in prices as a result, as Brent North Sea crude reached $ 36 a barrel, and continued to slump when the opening of European markets to $ 32 dollars a barrel.

But prices soon rose in the European markets, where Brent North Sea crude touched $ 37 dollars a barrel from yesterday afternoon, while West Texas crude reached $ 33.34 dollars a barrel.

Arkab: “OPEC will continue to consult with producers in a bid to ensure a hike of oil prices”
In the same context, Algerian Energy Minister Mohamed Arkab said in a statement to “Echorouk News” yesterday that OPEC will continue to consult with producers from outside it and strive to shore up oil prices.

According to Arkab, the decline in oil prices will affect the income of the Algerian economy, which depends on 95 percent of oil revenues. However, the minister added, “Despite this drop in oil prices, this will not deter Sonatrach from continuing its positive investments this year”.

According to the energy minister, it is time to start a real energy transition in Algeria in light of the conditions experienced by the oil market, and this transition should not be confined to the production of electricity, but must rather span various fields of endeavor.

Russia: “We can adapt to the current prices for the next ten years!”

The reason that Russia refuses to sign the deepening and extension of the agreement to reduce oil production is shale oil, of which the United States is the largest global producer, according to Bloomberg.

And Russia believes, according to the agency, that it is time to pressure the Americans who increased the volume of shale oil production, while Russian companies kept their oil in the wells in compliance with the agreement to reduce production.

In this line, Russian media outlets quoted the Finance Ministry on Monday as saying that Moscow is able to adapt to the current oil prices within a period of 6 to 10 years to come.

According to the same sources, the Russian Finance Ministry stated that one of the options for obtaining financial liquidity to cover expenses will be through resorting to the National Wealth Fund, which has $ 150 billion in assets.