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Novel coronavirus hurts the Middle East and North Africa through many channels

Rabah Arezki and Ha Nguyen

COVID-19 crisis has prompted the OPEC+ countries to consider an additional cut in oil
production of 600,000 barrels a day as an emergency measure on top of the 1.7 million
barrels a day already pledged (International Energy Agency 2020).

The recovery of oil prices will depend on how successfully China and other countries
control the spread of the virus, the effects of which are becoming increasingly global.
Although the vast majority of cases have been in China, Korea, Italy, and Iran have seen
a surge in infections and many other countries have recorded some cases.

Figure 1 Brent oil price and future curves

Note: Data end on 28 February 2020

Figure 2 Oil price futures (US dollars per barrel)

20

30

40

50

60

70

80

90

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

Spot Brent oil price 25/09/2019 03/12/2019 28/02/2020

Dec 2020

Note: Expiration dates on horizontal axis. The colour lines show the future prices of Brent crude oil on 25 September 2019,
3 December 2019 and 28 February 2020.
Source: Bloomberg, L.P.