As of today, April 4, 2020, the price of oil is US $28.34 a barrel. The price of oil has been less than US$30 and as low as US$20 for about a month now. The Russians refused to cut production, and then Saudi Arabia said they will sell, in April, 12.3 million barrels a day, more than their production capacity, which means that they will use their reserves.
US president Donald Trump has tried to negotiate a truce, but both Saudi Arabia and Russia want the US to cut production also. These US oil companies are heavily indebted and need oil to be at least US$50 a barrel.
Both Saudi Arabia and Russia need far less than US$50 a barrel to make a profit. Even during the COVID-19 pandemic, nations are still in cold competition.
I surmise that the COVID-19 crisis is a global changing event equivalent to a World War. I predict the United States will be a very devastated nation because of the COVID-19 crisis, and will therefore be weakened as the global hegemony.
The US has 306,997 cases and 8,350 deaths. China has 81,639 cases and 3,326 deaths; Iran 55,743 cases and 3,452 deaths. Saudi Arabia has 2,729 cases and 31 deaths. Russia has 4,731 cases and 43 deaths. By far, the US is the most affected, both in number of cases and deaths.
Secondly, in two decades the US had three economic crashes, in response to each of which it bailed out the corporations and left the ordinary people to suffer — the 2000 dot com crisis, the 2008 Great Recession and now the COVID-19 crisis of 2020. This shows instability and will lead to class conflicts.
This is how Donald Trump got elected —by tapping into that working class discontent, although he wrongfully blamed it on immigrants taking their jobs.
In two weeks, 10 million new people claimed unemployment benefits in the US. This is shaping up to be worse than the Great Depression when unemployment in the US was 25%. The US Federal Reserve of St. Louis estimates that unemployment will be 32.1 % in the US.
Because the US dollar is the world reserve currency, its value will rise for a short time, but will eventually fall as it did in 2008, and its bounce-back will be uncertain.
If China bails out the world as it did in 2008 (bailed out the US), the US will rise, but if it continues its strategic competition with China, it will have major negative effects on its critical economy.
The other competitors for global hegemony will be less affected by the COVID-19 crisis, and, therefore, their recovery will be much swifter than in the US.
Belize is managing the COVID-19 crisis okay, with 4 cases and 0 deaths (at the time of this writing), but must pay attention to this tipping point caused by the COVID-19 crisis. Protectionism, nationalism and government surveillance, or control of its citizenry, will likely increase globally and locally.
Brian E Plummer