Opinion | As oil industry nears collapse, Saudi Arabia may have no option but to blink first in its price war with Russia
- Given coronavirus-weakened demand, and with Russia in a better financial position to ride out the price rout, a heavily indebted Saudi Arabia simply cannot afford to sell at such low prices for much longer, unless it wishes to take the oil industry down with it
A black swan is an unpredictable event, beyond what is normally expected of a situation and with potentially severe consequences. Such events are characterised by their extreme rarity and severe impact. The term was popularised by the 2007 book, The Black Swan: The Impact of the Highly Improbable, by former options trader Nassim Nicholas Taleb.
Since the beginning of March, oil prices have tumbled by roughly half. The industry is confronting what the financial press calls its biggest crisis in 100 years, as demand for petroleum shrinks.
Riyadh and Moscow had fallen out over the best strategy with which to respond to the huge fall in demand created by the spread of the coronavirus, as airlines were grounded and millions stopped using their cars to go to work.
