Oil’s Stunning Demand Collapse Threatens Closures Everywhere
- Russia, U.S., Canada stand to suffer the most: Goldman Sachs
- Storage space, not production cost, likely to decide survivors
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The survivors of oil’s last crash were the lowest-cost producers. But the crisis engulfing the industry now is so fast, the same rules don’t apply.
From the shale patch of Texas and the oil sands of Canada to the plains of Siberia, production of at least one in every 10 barrels around the world is likely to be shuttered as demand is shredded by the coronavirus pandemic. Cost won’t be the ultimate arbiter for producers this time, because as the International Energy Agency says, “there could soon be no place for their oil to go.”