
The oil market in crisis
What's the oil price, how will this impact production and supply, and what does it mean for the upstream sector as a whole? Bookmark this page to get the latest news and views from our team of global oil market experts.
Sign up today to get the best of our expert insight in your inbox.
The oil price crash: frequently asked questions
The coronavirus outbreak has derailed OPEC+, thrown the oil market into turmoil and sent an already unloved sector into freefall. Here we address some of the most frequently asked questions about the oil price crash and what it means for the energy sector.
Why did the oil price crash?
What’s good for public health is bad for economies. Strategies to contain the spread of coronavirus, such as limiting people's movement, have directly lowered oil demand, putting downward pressure on prices. In the face of these challenging conditions, the OPEC+ group, made up of OPEC and its leading allies including Russia, failed to agree on concerted action to cut oil production to stabilise prices. The market is now facing the spectre of unrestrained production from the end of March once the current OPEC+ agreement expires. Meanwhile, oil demand is set to fall further as additional measures are put in place to limit the spread of coronavirus. The growing supply-demand imbalance is putting strong downward pressure on prices.
How do low oil prices affect the upstream sector?
For oil-producing companies and countries, revenues and cash flow are collapsing. If low prices are sustained, high-cost producers will exit the market. More broadly, less money will be available for investment and distribution to shareholders. Companies will delay new projects and cut expenditure at existing operations. Dividend payments will be cut or offered as a scrip. Petro-states – including Russia and many Middle East countries – will be hit hard. Those with wealth funds will be better able to maintain government spending for a period, but those without funds will need international support or to make sweeping cuts.
What's OPEC's next move?
In the short term, the leaders of OPEC are focusing on increasing market share rather than stabilising prices. For 60 years OPEC has off and on taken a policy to balance the oil market, including the last several years when it has worked with its non-OPEC partners to manage supply. That approach has given way for now under the weight of oversupply and falling demand. OPEC's leading producer Saudi Arabia is currently guiding that it will increase its oil sales by over 2 million barrels per day in April. Other OPEC+ producers will also be free to maximise production.
The economic cost to oil exporters of low prices is very high. So over time, the impetus to try to rebalance the market grows. However, the effect of low oil prices also has a growing effect on other higher-cost suppliers such as the US. OPEC+ producers may want to wait to see the impact of low prices on those outside OPEC who have benefited from its policy of production restraint the last few years.
Browse more news and analysis
Loading...
Meet the team leading our oil market research

Alan Gelder
VP Refining, Chemicals & Oil Markets
Alan is responsible for formulating our research outlook and cross-sector perspectives on the global downstream sector.
Latest articles by Alan
-
Featured
What lies ahead for the oil markets in 2022? | 2022 Outlook
-
Opinion
Survival of the fittest refineries: what are the metrics that matter?
-
Opinion
Refinery-petrochemicals integration: your questions answered
-
Opinion
Oil demand interview with Harry Tchilinguirian
-
Opinion
Why refinery-petrochemical integration is the downstream trend to watch
-
Opinion
为什么说炼化一体化是值得关注的下游趋势

Ann-Louise Hittle
Vice President, Oils Research
Ann-Louise directs our Macro Oils Service and is a frequent contributor to numerous industry publications.
Latest articles by Ann-Louise
-
Featured
What lies ahead for the oil markets in 2022? | 2022 Outlook
-
Opinion
COP26 oil demand: in the cross hairs of emissions reduction
-
Opinion
US tight oil and the global oil market
-
Opinion
December '18 OPEC meeting: production cuts expected

Andrew Harwood
Research Director, Corporate and Upstream Research
Andrew is responsible for Wood Mackenzie’s corporate coverage in Asia Pacific.
Latest articles by Andrew
-
Opinion
Will COP27 be a turning point for oil and gas funding?
-
Opinion
How hard will the oil price crash hit APAC upstream investment?
-
Editorial
Will Asia-Pacific's O&G sector join the global recovery in 2019?

Angus Rodger
Research Director, Asia Pacific
Angus leads our benchmark analysis of global Pre-FID delays, and deep water developments.
Latest articles by Angus
-
Opinion
Can Asia avert a gas supply crisis?
-
Opinion
COP26: the future of upstream is in governments' hands
-
Opinion
Catch, don’t release: the dawn of the CCS era
-
Opinion
Which Supermajors’ portfolios are most resilient?
-
Opinion
Trump's art of the OPEC deal
-
Opinion
Coronavirus, China and the big oil crash

Simon Flowers
Chairman, Chief Analyst and author of The Edge
Simon is our Chief Analyst; he provides thought leadership on the trends and innovations shaping the energy industry.
Latest articles by Simon
-
The Edge
What price LNG
-
The Edge
Wham, bam, CBAM
-
The Edge
The pros and cons of an upstream windfall tax
-
The Edge
How to rate IOCs’ resilience and sustainability
-
The Edge
How Europe breaks its dependence on Russia
-
The Edge
How the Russia/Ukraine war changes energy markets

Ian Thom
Research Director, Middle East Upstream
Ian is a research director focused on the Middle East upstream sector.
Latest articles by Ian
-
Opinion
Upstream: short-term spend and long-term trend
-
Opinion
Oil and gas: a risky business
-
Opinion
Middle East oil & gas operators in a better position to weather the storm than global peers
-
Opinion
Oil price crash: how Middle East, Russian and US upstream industry responses compare
-
Opinion
Middle East boosts its unconventional gas resources
-
Opinion
Libya’s oil blockade – and the million b/d loss in exports

Fraser McKay
Vice President, Head of Upstream Analysis
As head of upstream research, Fraser maximises the quality and impact of our analysis of key global upstream themes.
Latest articles by Fraser
-
Featured
Upstream oil and gas: top trends and wildcards to watch in 2022 | 2022 Outlook
-
Opinion
Eni and bp get up close and personal in Angola
-
Featured
Global upstream oil and gas: new challenges ahead in 2021

Michael Moynihan
Research Director, Russia Upstream Oil and Gas
As a research director in our upstream team, Michael analyses developments in the upstream industry in Russia.
View Michael Moynihan's full profileHave you assessed the impact of the oil price on your supply chain?
Understand how the oil price crash will affect your business. Wood Mackenzie's trusted market intelligence across sectors, proprietary tools and expert analysis helps you plan and strategise for a post-coronavirus reality. Contact us to talk to an expert in your industry.