Even before Covid 19 took full effect on the world economy, a ruthless oil price war involving Russia and Saudi Arabia had led to a sharp drop in the price of oil, and with the pandemic leading to a huge fall in demand, the price of oil has now dramatically collapsed. The consequences of this collapse are far reaching, not least in the US where the domestic shale industry is under severe pressure. However, it is by no means given that the current collapse of the oil industry will have a long-term beneficial effect on the reduction of carbon emissions and the development of alternative sustainable technologies. Paradoxically there is now likely to be huge political pressure from large oil corporations to restrict the regulation of carbon emissions on the grounds that they hinder economic recovery. We face the very real danger of an emboldened and resurgent oil industry, positioned ever more centrally within our political and economic systems. Such an eventuality would be a disastrous outcome to this current pandemic.
Adam Hanieh is a political economist and a Reader in Development Studies at SOAS. His latest book is Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East (Cambridge), which was awarded the 2019 British International Studies Association International Political Economy Group Book Prize. His talk will look at the economic and geopolitical implications of the oil market crash and its potential impacts on the struggle to mitigate climate change.
29th June 2020