As predicted last week, a dithering performance in Doha from the members of the Organisation of Petroleum Exporting Countries (OPEC) and esteemed guests, resulted in a dip in oil prices on the global market.
At the beginning of this year, we said that tensions caused by persistently low oil prices and the simmering sectarian discontent of Sunni/Shia antagonism could threaten to rip OPEC in two. The aftermath of the Doha Witenaġemot, a 14-hour masterclass in Realpolitik standoffishness, has shown that this possibility is closer to the realms of probability than most would countenance.
Whilst 18 nations wrangled for production stasis in the Qatari capital, the harsh realities of a year and a half of plummeting oil revenues have manifested on the business level.
American financial services company, Standard & Poor's, have published a report listing 242 companies at risk of imminent bankruptcy. The report details that defaults on corporate loans so far this year have hit $50 billion, the highest rate since the financial crisis in 2008-09.
For the first time, this list of institutions in distress is not dominated by the denizens of the financial sector, but those in the oil and gas sector, followed by the extractives industries and the steel trade. As oil prices plateau around the $40 mark and petrocurrencies devalue every other month, the oil depression deepens. Wherever the bottom may be on this tortuous plunge, the landing will resound with the same crunch.
The real question is whether we lost our footing, were pushed or even jumped….
