The oil price war that contributed to the recent stock market plummet represents a structural shift in the energy market that will have lasting repercussions for producers around the globe, says Goldman Sachs Research’s Jeff Currie. Saudi Arabia’s decision to slash prices marks a return to what Currie has called the New Oil Order, where low-cost producers increase supply from their spare capacity to force higher-cost producers to reduce output. With the coronavirus dragging down oil demand, the move to grab market share will hit US shale producers at a time when they are already facing pressure on their balance sheets. The open question is whether it will be enough to force a restructuring of the industry to better align capacity with the long-term demand.
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This podcast was recorded on March 10, 2020.
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