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The supply-demand shock caused oil prices to plummet and financial markets to collapse
.
OPEC decision
OPEC decisionOn March 5, OPEC proposed to cut production by 1.
5 million barrels per day in the second quarter of 2020, of which OPEC countries cut production by 1 million barrels per day, and non-OPEC but unified producers (mainly Russia) cut production by 500,000 barrels per day
.
Uncertainty about COVID-19 and oil demand
Uncertainty about COVID-19 and oil demandOil prices have slumped by about $20 a barrel on expectations that the coronavirus outbreak will depress production and demand for oil
.
China's oil demand has plummeted as China shuts production facilities to contain the outbreak
.
The report predicts that growth in global oil demand in 2020 will decline for the first time since 2009
.
Because of China's growing importance in the global economy, its economic setbacks will seriously affect other regions
.
The slump in oil prices has tightened financial markets already battered by the pandemic
.
Economic and Social Impact
Economic and Social ImpactMiddle East and North Africa (MENA) could be hit hard: Oil prices tumble as Covid-19 spreads
.
The ability to prevent and control the epidemic depends on the strength of the national public health system
.
Among the 191 health systems in the world, WHO ranks most MENA countries higher, with a few exceptions, such as Yemen (120) and Djibouti (157)
.
The wars in Syria and Yemen will also hinder the functioning of the health system
.
Lower oil prices are likely to lead to lower incomes for MENA oil exporters and lower foreign direct investment, remittances and aid from exporters from indirect importers
.
Some countries, such as the GCC countries, still have reserves and should use them
.
Other oil exporters such as Algeria and Iran have exhausted their reserves and can only rely on flexible exchange rates, private sector reforms and broader economic transformation
.
In net oil importers such as Lebanon, Jordan and Egypt, a recession will exacerbate already high public debt
.
Empty treasuries will compound the economic consequences of the coronavirus pandemic
.
The region needs a lot of international support to get through these tough times
.
