Since the beginning of September, the world crude oil prices have continued to drop, and plummeted on September 8th. The trigger for the slump is Saudi Arabia’s decision on cutting prices. On September 5th, it announced to lower the crude oil prices at all levels exported to Asia and the United States, and cut the prices of the light crude oil exported to Northwest Europe and Mediterranean at the same time. This is a result of the recession in the global oil market.There are two reasons for the pressure of the international oil price. One is that the global epidemic control situation is severe currently, which seriously restricts the economic operation and depresses the market demand for crude oil. The other is the increase of supply.The sharp drop in oil prices shows again that the theme of the world crude oil market has changed greatly. The balance of the oil market based on Saudi Arabia’s self-sacrifice is very fragile, making it face both domestic and foreign troubles at the same time.This event, to some extent, indicates that the oil producing countries represented by Saudi have abandoned the reduction agreement in oil production and have turned to compete for the market share. However, Saudi hasn’t made a statement on its strategy publicly. The follow-up changes remain to be seen.
