Deep Dive with AKB - Oil's great slide: What this means for India

The oil market recently saw something that it had never seen before. For the first time in history, the prices slid to less than zero on 20th April. Because of a supply glut in the wake of the global coronavirus crisis, and a demand slump, US crude oil futures collapsed to less than $38 per barrel. Desperate traders were paying to get rid of oil. So much so that President Donald Trump had to intervene and announce that the US would add 75 million barrels to its strategic petroleum reserves. The Organization of the Petroleum Exporting Countries (OPEC), also stepped in along Russia and other allies, and announced a cut in production.

The shock of the “negative oil prices” was felt across the world, with stock markets globally reacting negatively to the development.

For perspective, it should be noted that crude oil prices hovered around $100 a barrel in international markets between 2010 and 2014, even going as high up as $128 in 2012. Even at the start of this year, they were close to $67 per barrel.

So what has happened lately to cause such a massive drop? How bad is the global outlook? And what does all this mean for India, which is a major importer of petroleum products?

Let’s take a Deep Dive With AKB to understand.