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    Case Event

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    jdretumban

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    Case Event

    Uploaded by

    jdretumban
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    4 views1 page

    Case Event

    Uploaded by

    jdretumban

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Case Event – The 2020 Oil Price War and COVID-19 Impact: In early 2020, a

    dispute between Saudi Arabia and Russia over oil production cuts led to an increase
    in oil supply. Around the same time, the COVID-19 pandemic caused an
    unprecedented global economic shutdown, severely reducing demand for oil. This
    dual shock resulted in a historic plunge in oil prices, with U.S. oil prices at one point
    turning negative. The event highlighted the extreme volatility of the oil market and
    its sensitivity to both supply and demand shocks.
    Conclusion: The global oil market is a complex and vital component of the world
    economy, demonstrating the classic economic principles of supply and demand. The
    market's reactions to changes in these factors offer invaluable lessons in
    economics, making it an ideal subject for study and discussion.

    Free-Response Questions:
    1. Discuss how the global COVID-19 pandemic affected both supply and demand in
    the oil market. Discuss in terms of the demand and supply impact.
    2. How does the oligopolistic nature of the oil market contribute to its price
    sensitivity?
    3. What are the economic implications for (a) oil-dependent countries (like Saudi
    Arabia) and (b) consumers and importers (like the Philippines) when there is a
    significant drop in oil prices?

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