The Angolan Economy: The Return to a Lower Oil Price Environment

The oil-price war between Saudi Arabia and Russia that resulted from the failure of OPEC+ partners to come to an agreement on their production strategy going forward led prices to crash more than 35% in just a few days. Brent currently stands near US$27, which compares with a price of around US$50 before the infamous Vienna meeting earlier this month. In previous oil-price wars, prices gradually declined over several months and not so abruptly as this latest collapse. Also, all of them lasted more than one year and prices fell by at least 50%. The current situation is somewhat different, as the existing demand shock is so significant and has never taken place at the same time as this supply shock. Therefore, uncertainty about the outlook for global crude prices is likely to persist, and will depend on how long Saudi Arabia’s latest strategy of shock-and-awe the oil market will last and how quickly everyone at OPEC+ will return to the negotiation table.