The Simultaneous Economic Impact of the Corona Virus and the Reduction of Oil Prices on OPEC Organization

Abstract

The world’s impact coincided with two major events at the same time that had a major impact on the global economy without exception in the beginning of 2020, as there was a very large drop in oil prices at the level of the world, as this coincided with the emergence of the Corona virus, which affected the economy of all countries of the world without exception, and so it was the research problem is summarized in reaching the extent of the impact of the coincidence of a decrease in global oil prices with the existence of the Corona crisis on OPEC organization, and therefore the multiple regression model was relied upon, depending on the <i>World Bank data</i>, and the research <i>concluded</i> that 78.1% of the change in <i>Y</i> is due to The change in <i>X4</i> and <i>X3</i> and 21.9% of the changes due to other factors were not taken into account. It is noticed that <i>54.6%</i> of the change in Y is due to the change in oil price <i>X3</i> and 23.5% of the change in <i>Y</i> is due to the change in <i>X4</i>, and the research also found that it was the Corona pandemic Clear effects were reflected in the image of reducing oil demand as a result of the precautionary measures taken by the countries of the world to confront the Corona pandemic, especially with the prevention of air traffic, as well as the reduction of travel by land. Based on this, the research <i>recommends</i> that OPEC organization should prepare for the near future by developing flexible strategies and scenarios that take into account the sharp price fluctuations of oil, not fully relying on oil as a source of public revenues for some OPEC countries, and working on finding auxiliary factors as a source of income in addition to oil. Besides activating the role of a management for disease crises and pandemics, take their consequences into consideration, and follow scientific methods in facing their economic consequences.