Latest update November 4th, 2024 1:00 AM
Dec 22, 2020 News
Kaieteur News – The price of Brent crude is slowly inching back up after nearly a year of sinking down, since countries have begun to accept and administer the COVID-19 vaccine.
Brent, the standard Guyana’s Liza crude is being traded against, was comfortably over US$60 a barrel early in 2020. However, due to the Russia-Saudi Arabia oil price war and more critically, the COVID-19 pandemic, Brent crashed to US$20 in the Spring. Today, Brent is nearly $51 a barrel. Guyana’s first million barrels had been sold at US$55 a barrel.
Earlier this month, the United Food and Drug Administration (FDA) approved the Pfizer and BioNTech coronavirus vaccine for emergency use, following Canada and the United Kingdom. The vaccine is being rolled out for first responders, key public officials and others. US President-Elect, Joe Biden, had the vaccine administered to him yesterday on national television. Yesterday, The European Medicines Agency (EMA) – the European Union’s medicine regulator – also approved the drug for its 400 million plus population.
As the vaccine becomes more widely administered and certain key sectors begin to revitalize, oil prices could continue the slow upward gains, which they have made over the past few months.
As for Saudi Arabia and Russia, there had been a breakdown in talks between Russia and the Saudi-led Organisation of the Petroleum Exporting Countries (OPEC) over proposed oil production cuts in the midst of the pandemic. By the end of the first half of the year, Russia and Saudi Arabia agreed to production cuts.
Due to the price crash this year, Petroleum Consultant and Attorney-at-Law turned Minister of Culture, Youth and Sport, Charles Ramson, had said in March that there would be a significant dent in Guyana’s projected revenues. While the country was expected to get US$300 million of oil revenues added to the Natural Resource Fund this year, the actual revenues came up to less than half of that.
The rest of the world has suffered too. In April, Rystad projected that offshore drillers would lose in excess of US$3 billion in contract value. Many exploration and production companies like ExxonMobil and Hess were forced to sell off assets to focus cash on their most profitable projects, like Guyana.
The fallout from the pandemic has also strengthened calls made by sustainable energy, for the transition away from oil to be sped up. Exxon, for instance, has gotten a lot of pressure from its investors to substantially cut down its emissions.
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