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.
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.
Read the full Op-Ed here