How are the oil-rich countries of the Persian Gulf, usually called the GCC countries, coping with the current pandemic crisis and other growing global pressures? The common assumption tends to be that with their fabulous wealth from floating for decades on seas of oil and gas the emirates and kingdoms of the region will all get through and overcome all challenges.
But if that is what people think, then they should think again. In reality this is a time when almost everything is turning against these Arab states.
Their most precious export, that oil and gas — accounting for two thirds of total receipts — is losing market share and sagging in price. The current collapse in world energy demand has simply accelerated the trend downwards and sent oil markets into a swirl of extreme volatility. At one stage earlier in the year, the oil price actually went negative. Demand may recover a little, but so will supply from many sources outside OPEC, including the hundreds of nimble shale oil producers in the United States, whose recent peak reached 12 million barrels a day, almost an eighth of total world output, and they are ready to bounce back.