Weather Seems To Be Cold For Oil Prices, Experts Warn, Stating Gulf Economy Could Slow Down
Weather Seems To Be Cold For Oil Prices, Experts Warn, Stating Gulf Economy Could Slow DownOil Rig (Photo by Jeff J Mitchell/Getty Images)

On Wednesday, experts reportedly warned that the Gulf states will see a long period of low oil prices and will lead to subdued economic growth.

The trade war between the world’s largest economies and anticipated slowdown of the global economy will reduce the demand for oil, said the experts in a conference.

“A cooling of the global economy will reduce demand for oil, which coupled with rising competition from renewable energy sources and shale crude, will lead to low oil prices,” said former Lebanese Minister of economy and trade Nasser Saidi.

More than 80 per cent of the revenue of the six nations - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates of the Gulf Cooperation Council (GCC) - comes from energy trade.

Oil prices crashed in mid-2014, but later rebounded after OPEC and non-OPEC producers reduced production. But the rate dropped as producers increased output to compensate for expected losses from Iran as the US reimposed sanctions.

The prices lost more than 25 per cent compared to a four-year high of $85 per barrel to $61 per barrel of Brent crude as traded in London on Monday.

World Bank senior vice-president Mahmoud Mohieldin said that the unemployment rate among Arab youths is 30 per cent and even more among females, pointing to the growth not producing jobs.

Last week, OPEC and non-OPEC producers decided to cut oil production by 1.2 million barrels a day, from January, to increase the price, while some analysts were warning that it will hit the growth of the economy.

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