RUSSIA (Russia is forecast to see negative GDP growth in 2020):
Oil prices have plummeted by more than 30% in the last two months. An established understanding between Saudi Arabia and Russia — two of the world’s largest oil-producing countries. Saudi Arabia & Russia have been in meetings for the last couple of months trying to hammer out a market share deal, these meeting failed to reach a satisfactory arrangement, so Saudi Arabia decided to increase production to more than 12 million barrels a day, thus flooding the market & driving down prices.
A severe fall in the Russian Ruble after the dramatic oil price drop has given the Russia a strategic advantage. Russia can now pump & produce oil at a lower price or similar price than Saudi Arabia. This situation has sent shock waves around the world & could see the demise of OPEC. If this situation continues, look for decreased investment & activity in the US & International oil patch.
Russian, European and American Oil / Gas (Owners & Operating companies) are expected to slash their 2020 CAPEX expenditure by as much as 50% or more, this is damaging news for the International Engineering, Procurement & Construction sectors. 1,000’s of construction professionals could be laid off in the next couple of weeks or months, add this situation to the Coronavirus Pandemic and you have an economic event(s) that looks like a “Perfect Storm.”
The reality is that many Russian related construction projects will be delayed, deferred or worst case situation abandoned due to the (COVID-19) virus, this situation short term could raise construction unemployment rates.