The Impact of Covid-19 on Pricing in the Global Oil Market

Abstract

This article is devoted to analysing current factors affecting prices in the global oil market for the period from December 2019 to July 2022. The study focuses on the processes taking place in the economy of the United States and the eurozone countries, which led to an increase in inflation in response to the economic crisis caused by COVID-19 and their impact on current oil prices. It analyses the traditional and non-traditional measures of the US and Eurozone monetary policies designed to stimulate business activity and bring their economies out of recession. It is observed that the actions of financial regulators contributed to the growth of inflation rates, especially in the energy sector. The paper emphasizes the growing crisis in the United States and the eurozone countries, which in the future may lead to a decrease in the consumption of energy resources, including crude oil and petroleum products, which will negatively affect the stability of the global oil market. The influence of factors of the growth of US dollar inflation and measures aimed at regulating the physical volume of oil production in the framework of OPEC+ deals, which affect pricing in the world oil market, is compared using the correlation analysis. As a result of the study, it is concluded that during the analysed period there is a shift of factors affecting pricing in the world oil market from monetary to supply-demand factors in the commodity market. The current inflationary pressure of the US dollar and the euro, combined with a reduction in oil supplies to the world market due to the restrictions imposed, makes it difficult to predict oil prices and leads to an increase in the volatility of oil quotes.