Covid-19 Oil Collapse Is Geopolitical Reset in Disguise - Bloomberg

Covid-19 Oil Collapse Is Geopolitical Reset in Disguise - Bloomberg:

The world is on the cusp of a geopolitical reset. The global pandemic could well undermine international institutions, reinforce nationalism and spur de-globalization. But far-sighted leadership could also rekindle cooperation, glimmers of which appeared in the G-20’s offer of debt relief for some of the world’s poorest countries, a joint plea from more than 200 former national leaders for a more coordinated pandemic response and an unprecedented multinational pact to arrest the crash in oil markets. 

The remarkable effort to address the turmoil in the oil markets will be critical to oil’s eventual balance — although the past two weeks have shown that its promised production cuts were too slow and insufficient in the face of oil demand’s plunge. The challenges and opportunities that the collapse in the oil market is pushing to the fore are perhaps just the first taste of Covid-19 induced geopolitical crises that world leaders and policy makers will need to grapple with in the coming months and years.

As history has shown, a big change in energy markets often precipitates a big change in geopolitics. For instance, the shift from coal to oil catapulted Middle Eastern countries to strategic significance. And the recent technology-driven boom in shale oil elevated the United States to net oil exporter status, changing its outlook on the importance of oil in global affairs. We now face a disruption of such proportions that it, too, will reorder some power relationships.