This article is part of a new series launched by the AUB Issam Fares Institute to reflect on the impact of the #COVID-19 pandemic on various levels: the economy (global, and national), globalization, multilateralism, international cooperation, public health systems, educational system, refugee response, among other topics.Amid the coronavirus pandemic, oil prices have drastically plunged to their four-year lows. However, since the current slump is “event-driven”, prices will likely undergo a sharp reversal once global markets regain confidence. As such, fossil-fuel dependent countries have a narrow window of opportunity to enact pricing reforms, finance sustainable policy instruments such as smart-metering, and diversify energy generation base. Policy inaction will be a huge missed opportunity.
While a low oil price environment hurts the economies of major oil-exporting countries, they can be an economic lifeline for the struggling economies of oil-importing countries. In the Middle East, countries like Lebanon, which are heavily dependent on oil and oil-index fossil fuels to generate power, are particularly poised to get some relief.
Authors:
Benedetta Bonometti, researcher at the Future Energy Program (FEP) of Fondazione Eni Enrico Mattei, and a graduate student in public policy with a specialization in energy, resources, and development at Sciences Po Paris. Her research interests focus on fossil fuel and nuclear energy policies and socio-economic development and governance in the Middle East.
Ali Ahmad, Director, Energy Policy and Security Program, Issam Fares Institute for Public Policy and International Affairs, American University of Beirut.
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