 by the SOAS Department of Economics and also the Open Economics Forum. So I'll be your moderator for the day. My name is Amal Nasser. I'm an economist with the SAAA Center for Strategic Studies. I think I'm working on Yemen and the surrounding region. And we have our speaker for the day is Dr. Adam Hania. He's a reader in Development Studies at SOAS where he teaches the models of migrant labor in the global economy and political economy of development. He works on the political economy of the Middle East, labor migration, class and state formation in the GCC countries and Palestine. He is also an author of three books, the latest of which is Money Markets and Monarchies the Gulf Cooperation Council and the Political Economy of Contemporary Middle East, published in 2018. So our format for the day will be basically that Dr. Hania will be presenting for about 20-30 minutes and then we'll be collecting your questions and then we'll have a couple of rounds of questions for Dr. Hania. So I'd like to welcome Dr. Hania and the floor is yours. Thank you. Thank you very much. Thanks everyone for being part of this today. What I want to do is cover basically two themes in today's presentation. Firstly, I'm going to look at some of the debates and trends in the global oil markets and what's been happening to the oil price. Secondly, I want to zoom in a little bit on what this might mean for the Middle East region, particularly the Gulf Cooperation Council states, which as Amal pointed out is an area that I work on. So I think we probably all remember the headlines from a little over a month ago, April 20th in fact, when the US oil benchmark price for West Intermediate Oil turned negative for the first time in history, dropping to minus $40 dollars a barrel that gathered a lot of press and coverage globally. This was part of a wider and very sharp decline in oil prices that had begun in the beginning of this year and has continued essentially until today. There's a variety of reasons for this decline and I just want to highlight two in particular and then speak a bit about what this might mean for different actors in the oil industry and oil markets. The first of these reasons for the decline is the obvious collapse in demand for oil and oil products as a result of the COVID-19 pandemic with much of the world under lockdown, particularly through March and April, an end to air travel essentially, global air travel, a dramatic reduction in road transport and a massive drop in demand for energy. This collapse in demand was really felt through March and April. In fact, throughout April, the reduction in US automobile use alone led to an astonishing 5% drop in global oil demand. So that's about the same as if the whole of Europe, Africa and the Middle East had simultaneously stopped driving. I think it's hard to see both illustrates the reliance of particularly North America on cars and automobiles, but also the way that this drop in automobile use due to lockdown actually led to such a large drop in demand for oil globally. So that's one thing and this obviously continues today. We see this demand continue to be at very low levels. The second thing though that was happening also at the beginning of the year was a significant increase or promise increase in the world supply of oil. This followed an announcement in early March by Russia and Saudi Arabia that both these countries were going to remove their limits on oil production levels. They had placed some limits since basically the end of 2016. This was something called the OPEC Plus agreement, which I'm happy to speak about a bit more perhaps in our discussion. But effectively, one decision of both Russia and Saudi Arabia did was to project an increase of supply of oil onto the market at the very same moment demand was cratering due to the pandemic and the associated measures around that. So we saw very rapid drop in demand combined with increasing supply and this had a very dramatic effect on prices, one of which was to briefly see West Texas Intermediate Oil drop below or drop into negative territory. Now today, Brent, which is the benchmark, international benchmark for oil, is around $34 a barrel. At the end of April, it was around $20 a barrel, but it's half of what it was at the end of December 29. So we see quite a distinct and continuing fall in the price of oil, even though it has increased somewhat since that April moment. So what does this mean for the oil industry? And I think I want to just speak a little bit about global oil industry. And then, as I said, I'll move a little bit onto the Middle East and some of the major oil producers in the Middle East. So this obviously has hit all oil producers in a major way, but it's very important to differentiate the effects. In particular, many oil companies involved in U.S. markets, particular shale and fracking in the United States, have been very severely hit by this drop in the price of oil because this particular segment of the oil industry requires a relatively high price of oil in order to operate profitably. So with this very dramatic drop, they have essentially fallen into territory where it's very difficult for them to operate. And at the same time, this is very important to highlight as well, many of the companies involved in shale and fracking in the United States also have very high levels of debt. We can see this one indication of this in the fact that energy companies, shale and fracking companies in particular, now make up more than 11% of the entire U.S. junk bond market. So a very significant proportion of low-quality debt that has been offered and owned by these companies involved in shale and fracking. So in fact, these kinds of companies, these energy companies have been the biggest issuers of junk bonds in the United States for 10 out of the last 11 years. So with the drop in the price of oil, that segment of the oil industry has been hit very severely. So I think if there's little doubt, and this is widely predicted and it's in fact, it's started to happen, that we're going to see some widespread bankruptcies in that particular segment of the North American oil industry in shale and fracking. But I think it's very important not to read this as the somehow and oil industry return to renewable energy, something that is necessarily pro-climate, which unfortunately I think a lot of commentators have taken this line that this drop in the price of oil is something positive in terms of climate change. Because I think one of the things that is likely to happen as a result of this drop in or this collapse in parts of the shale and fracking industry in North America is that the big oil majors, the large oil companies, so we're talking here about companies like BP, Shell, Exxon and a few European firms, these firms, what we can call big oil, look set to further consolidate their control over the industry as a whole. Typically what happens at moments of crisis is these companies that go bankrupt end up getting swallowed by larger, larger firms. And I think that's one of the likely or certainly a potential outcome of this current moment. Because these big oil companies, although they are involved in the shale and fracking industries, tend to be more diverse in terms of their geographical interests, in terms of which parts of the energy market they're involved in, and also their involvement in kind of downstream sectors, so petrochemicals and other oil products. So I think one of the things that we're likely to see is some of these big oil firms, international oil firms, diversified oil firms come in and buy out some of the distressed assets that we're likely to see in parts of the shale segment of the market. There's also interestingly a move by some big banks. There was a report a couple of weeks ago to this effect that big banks and big American banks, for example, JP Morgan Chase, Wells Fargo, Bank of America, Citigroup, these very large financial institutions are also in the process of setting up independent companies to directly own oil and gas assets in the sector of shale. So we could see the direct entry of these large financial firms into this sector. So that I think is one aspect. It's important, I think, to differentiate this moment of crisis across the oil industry as a whole. The other thing that I would say in this respect is that we can see this moment also being used to accelerate measures that were previously seemed to be off the books. So for example, in the United States, a number of states have passed laws in the recent weeks criminalizing protests against fossil fuel infrastructure, calling fossil fuel infrastructure an essential service, and thereby criminalizing protests against oil pipelines and other sorts of fossil fuel infrastructure. The Trump administration has also taken advantage of this moment to loosen environmental regulations for things like power plants, for factories and other industrial facilities, essentially allowing polluters to self monitor their own pollution levels. We can see in Europe as well large banks and financial firms that are lobbying for relaxation of climate change, reporting requirements and stress tests around climate change. So the point being is that this moment of crisis as it's so often, crises are so often seen to be, is being used as a moment to kind of push through things that may have been previously off the books and perhaps reverse some of these climate change demands that have been won in previous years. So that's a very quick, if you like, overview of parts of the island. There's a lot more that can be said about that and we can perhaps return some of this in discussion. But I do want to turn to the Middle East here because the Middle East and oil producers in the Middle East, the oil producing states in the Middle East are really important part of the story of what we're seeing in oil markets more generally. As I'm sure people are on this web and I realize the Saudi Arabia and other Middle East states are major parts of the world oil industry. Approximately 60% of the world's oil comes from just 25 oil fields and these are mostly located in Saudi Arabia and other other Middle East states. When we talk about Middle East oil producers we can talk about on one hand the Gulf monarchies, the DCC or Gulf Operation Council states. So here I'm talking about Saudi Arabia, United Arab Emirates, Kuwait and other other states that are monarchies and they have a very particular kind of population structure which I'm going to come to in a second. So these DCC states are very important parts of the oil market. Saudi Arabia in particular because it's a swing producer. It's able to increase or decrease its supply of oil onto the world market relatively easily. But then adjacent to the DCC or in addition to the DCC states, we have other countries like Iraq, Iran, Libya, these states are also major producers of oil and they will also be hit by this drop in the price of oil that we've seen. But I think again we need to differentiate the impact here quite carefully. In the Gulf, in the DCC states, Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar and Oman, we are certainly going to see cuts to social expenditure and a reduction in some of the large spending programs that were announced over the last few years as part of kind of economic reform strategies in the Gulf states. But at the same time these Gulf states do have a much greater capacity and accumulated surpluses to be able to weather this storm in my opinion. I'm certainly not saying they're not going to be hit by the fall in the price of oil but they have a greater capacity to be able to perhaps ride this out. They have relatively low levels of existing debt, they have access to accumulated reserves and they can borrow fairly cheaply on international markets. Whereas if we look at some of those other states I mentioned, Iran, Iraq, Algeria and similar oil exporting states, it's a very different story. We can see these states are very dependent upon oil and have very little extra fiscal capacity. The other thing about many of these states, Iraq, Algeria, sorry, Iraq, Libya in particular of course, is that they are states where widespread conflict has been present for over a decade now. So they're going to be simultaneously hit with falling oil crisis as well as the conflict dynamics associated in those states as well as what is clear is going to be a very heavy global economic downturn. So I think what we're likely to see again in the Middle East is a widening differentiation which will further consolidate ironically perhaps given that we're talking here about a fall in the price of oil, but further consolidate the position of the Gulf in the Middle East. It's very interesting in this respect and I just want to briefly highlight this point in regards to Saudi Arabia because what Saudi Arabia has been doing very quietly over the last couple of weeks, essentially since April, is to really bulk up its sovereign wealth fund, the public investment fund, this PIF, sovereign wealth fund of Saudi Arabia, and use this sovereign wealth fund to buy up globally assets that are much cheaper because of the deep economic downturn. In fact, yesterday there was a report stating that Saudi Arabia had actually moved $40 billion from its central bank reserves to the sovereign wealth fund, public investment fund, to the two sovereign wealth fund. This is a really striking figure, it's about 10% of Saudi Arabia's foreign reserves. So what Saudi Arabia is trying to do is bulk up this fund and then use this to buy assets outside of the country. So what we've seen in the last month or so, Saudi Arabia has taken major stakes in a number of key companies. For example, and this one actually left a lot of analysts somewhat puzzled, but they bought into the cruise operator, Carnival, the big shipping line that was hit with all of the coronavirus scares over recent months. So they're now, I think, one of the major holders of Carnival. They've bought into BP, the big energy company, Boeing, Citigroup, Facebook, so they've increased their stakes in all of these firms in the last two to three weeks. Interestingly though, they have also bought into a number of the major big oil energy firms, so Equanor, Royal Dutch Shell, Total, as well as some Canadian, the two largest Canadian Shell companies. So it's quite interesting, much as I was saying more generally about the Shell industry in the United States, where we will see, I think, a lot of firms coming in and buying up some of the distressed assets in that sector, we can see Saudi Arabia doing this actually at the global level. This is not just energy companies they're buying into, but it's interesting that they are using this moment to actually increase their stakes in a lot of these firms. Just one statistic in this, in relation to this, prior to the pandemic, the public investment fund, Saudi Arabia's Software Fund, had about $2 billion of invested in US listed stocks. That is now around $10 billion, the value of holdings of US listed stocks by the public investment fund has now reached about $10 billion. So it's increased about five fold, just in the space of a few weeks. I think it's an indication of what what Saudi Arabia is trying to do. I think we can see similar patterns, not just in relation to Saudi Arabia, Qatar is doing playing a similar game, as is the United Arab Emirates. Hello Mr Hania, was it my connection? Hello, sorry about that. Can you hear me okay? Okay. Now we can hear you. Just need you also to turn on your camera. Yes, okay. Yes. Okay, sorry about that. So I think when I cut off, I was speaking about you know, one of the academic paradigms for understanding the Gulf is this idea of the Ronte estate that somewhere like Saudi Arabia is very much dependent upon its revenues from the sale of oil, petrodollars, and this shapes a lot of the social processes in the country. I think it's quite interesting though to think about what I've just spoken about, these kind of international expansion, where we have a diversification into financial assets globally. But still many of these, as I pointed out, are very heavily dependent upon the oil industry and oil markets globally. So it's I think something that upsets a lot of the typical ways we think about the Ronte estate model. So I just want to turn briefly now to another, I think this is a really important side of understanding the oil price decline and its impact on the Middle East. And that is the question of migrant workers in the Gulf. A sector of the region often gets missed out, I think in much of the analysis. Because I pointed out that poorer citizen populations in the Gulf will certainly be hit. There are poorer citizens in places like Saudi Arabia, and these populations will be hit by a cost of social expenditure and the kind of economic contraction. But really, migrant workers are essential to foreground here. Non-citizens make up about half of the population in the Gulf states, and about two-thirds of the labor force throughout the six GCC states. So this is really quite remarkable. There's no other place in the world that has such a high proportion of its population made up of non-citizens. We're talking, in some cases, the number of people holding citizenship at less than 10% of the resident population in the country in places like Qatar and the United Arab Emirates. There are more migrant workers in the Gulf than any other region of the global south. And because of this, it's very important in terms of remittance flows to the rest of both the Middle East, as well as South Asian countries, and further afield the Philippines and other places in Asia. Saudi Arabia alone ranks as the second largest source of remittances in the world. This is after the United States. So it's really quite striking to see this, or to put this at the center, I think, of our analysis. Because what we've seen in recent years is, or what we've seen repeatedly in the case of the Gulf, is that at moments of crisis, that the crisis first hits these workers, these migrant workers. Migrant workers are essentially bound to their employer. There's no route to citizenship for any of these workers, no matter how long they spend in the country, no viable route. They are banned from seeking alternative employment in the country. They are not even allowed to leave the country without permission from their employer. They often have to pay large recruitment fees, sometimes as high as 4,000 pounds, for example, in Qatar, to secure a job. And once that contract, their work contract is over, they're forced to leave the country. So the majority of these non-citizen migrants, these migrant workers are employed in the private sector. In sectors such as construction, retail, domestic work, a whole variety of private sector work, they're often very poorly paid and subject to highly exploitative and dangerous working conditions. Now, why is this so important places in the context of both the pandemic as well as the oil price decline? Because it's very clear that migrant workers have borne the brunt of both these elements, of both the pandemic as well as the economic downturn associated with the oil price drop. There are around 200,000, I think, latest figures infections, COVID infections in the Gulf. We don't have an accurate data, but it's doubt that the vast majority of this number are around migrant workers. And this is not surprising because most migrant workers are living in crowded labor camps, shared dormitories, they're bussed around in buses, holding a dozens of people. And what has continued for migrant workers, for example, in the construction sector, it hasn't stopped despite the pandemic. So if we look at Qatar, for example, which is building a whole set of infrastructure associated with the World Cup, it has a very high rate of infection. I think currently Qatar rates as 19th in the world in terms of infections from COVID. And what has the Qatari government done, they've essentially sealed off the areas that house where migrant workers, particularly construction workers, live. They've allowed the run free in those areas and tried to create a barrier preventing it from moving into more affluent urban areas. So as I said, construction is continuing. They've cut communication networks. Workers still, despite being sick, are still forced to go to work. No journalists are out in. So this is really, I think, very clear the differential effect of the pandemic on migrant workers in places like Qatar. Also similarly in the United Arab Emirates, there's been a blocking of kind of Western video apps for migrant workers at this moment. So this is one thing that we're seeing. The other thing that we're seeing is the mass layoff of millions of workers in the Gulf at this moment. So there's been, we can talk, for example, in Saudi Arabia. There's been a very significant expulsion of migrant workers. There was an internal UN memo leaked a few weeks ago where they were reporting a plan to deport 200,000 Ethiopian migrants from Saudi Arabia. There has been the beginnings of pressure on South Asian states, India in particular, other South Asian states that send migrant workers to the Gulf to repatriate their workers. And in fact, in Dubai, the former head of the Department of Finance in Dubai recently predicted a 10% drop in the device population this year, which is a really remarkable figure because of the level of workers that were planned to be sent home. So what does this mean and why is this important? And I'll wrap up here, but I want to just make the point that when we think about what's the impact of both the oil price decline as well as the pandemic on some way like the Gulf, we again need to differentiate and think about how these migration corridors end up being transmission vectors for the financial crisis in the Gulf region. When these workers get sent home, there are literally families across South Asia, the Middle East, East Africa and elsewhere who depend upon remittances from the Gulf for their day-to-day livelihood. So when workers lose their jobs, they're sent home, we see if you like a displacement of crisis to the countryside and urban areas of these surrounding regions. So I think this is really important that when we think about what does the oil market mean and what does the oil price decline mean, it's not just a question of fiscal capacity cutbacks to social expenditure. It's also about how Gulf states utilize this particular reliance on migrant work to kind of push the crisis onto neighboring countries. So there's a lot more that can be said in this respect, including about the wider Middle East, but I'll leave it there. Thank you. Thank you so much for the very interesting presentation. I'm going to start with a question from something you mentioned because I found it to be very fascinating. The whole Saudi Arabia increasing their investment in companies and everything, because I was kind of interested in knowing what could be the reason behind these austerity measures in Saudi Arabia at the moment, comparing to say a time of crisis in Saudi Arabia in 2011, where there was an imminent political danger that maybe like protests will erupt and the country responded by increasing spending. So now you have like a real health crisis and the response is austerity. They cut on salaries, they increased the taxes and so on, and yet at the same time, they are also investing abroad. So what could be the reason behind that? Yeah, I think it's important to kind of put this in the context of in the last few years, basically since 2014, 2015, all of the GCC states have put forward what they call vision documents. So these were economic reform documents, Saudi Arabia's Vision 2030, it was called, and essentially what these documents attempted to do, they were written in coordination with some large consulting firms, but essentially what these economic strategies attempted to do was to increase and support private sector firms in places like Saudi Arabia, to utilize oil revenues as a means of supporting some of the large conglomerates in these states, and at the same time, increase the proportion of private sector workforces that are made up of citizens. Because as I said, at the moment, the vast majority of the private sector workforce are non-citizens or migrant workers. So one of the goals of this was of Vision 2030 and they put this in various sectors, you know, target numbers for what they intended to do, but in order to do that, you need to make citizen populations be willing to accept much lower wages than they do currently. So this is partly why the austerity, you know, this needs to be seen as part of this longer plan associated with Vision 2030. Now, so since this, there was kind of a giving and throwing around wage cuts, etc., prior to the pandemic, but I think they're utilizing this moment of the pandemic as a moment to accelerate some of these changes that have been around much longer. They're not necessarily new things. Okay, thank you. It's also very interesting, like when you mentioned it, to differentiate between citizen workers and also expats living in GCC countries. So what do you see like the future of migrant labor in GCC countries with the absence of social safety nets? So this crisis revealed that the situation is very fragile for expats in these countries and also for citizens. They are also being hit by the implications of the crisis. So and we see these subsidization or nationalization of jobs in Saudi Arabia and maybe Oman, but I don't think the UAE is following such a policy. But what could be the future of this labor? We're seeing layoffs right now with implications also in South Asian countries. But do you think that GCC countries will be willing to even consider implementing social policies for non-citizens? I think it's very highly unlikely. I think that we need to, to some degree, think about who are these different migrant populations in the Gulf. And there has been an attempt to attract and offer like longer term kind of visa, you know, arrangements for higher end work parts of the workforce, wealthier migrant populations. So for example, in the UAE we can, there are significant, you know, wealth of Indian populations in the UAE who there has been an attempt in recent years to try to give them some kind of more permanent residency type status in the country. But the vast majority of migrant workers do not fall into those kinds of categories. So it's likely I think that those workers are not going to be faced or to be equipped with any kind of social support networks. In fact, we can see in this moment exactly the opposite happening. As I mentioned in the case of Qatar, also in the case of Saudi Arabia. This is not new, this kind of policy of, you know, using migrant labor at moments of crisis to, to, to displace the crisis. In 2010, when there was the downturn in, particularly in Dubai, and about half of device construction projects were either cancelled or put on hold at that moment. Again, there was a massive exodus and massive deportations that took place in Dubai at that moment. So I think very similarly, we're going to see that pattern repeated. We have a question here from our audience regarding the migrant laborers also working in the sector of construction. I'm not sure the person really understood what you were saying, but they were, they are asking if the sector is still functioning. Isn't it contradictory that the migrant laborers are being deported? So what are the implications of the COVID-19 crisis on the construction sector in GCC or maybe in Qatar most probably? Yeah, it varies across the different Gulf states. No doubt there will be a downturn in the construction sector. I mean, I think this is part not just of the oil price decline, but part of the more global economic downturn that we're heading into. So I think there's little doubt that the construction sector in the Gulf is going to be hard hit. But we see in the case of Qatar, because of the World Cup preparations for the World Cup, we see this kind of continuing construction taking place. And in other states as well. But so, yes, construction is continuing, but it's not continuing at the same pace or scale that it was prior to the pandemic. Also, we should be clear that a lot of the firms that are firing and deporting workers, they're not necessary. I mean, construction firms are definitely among them, but there are other whole range of other firms, retail firms, you know, other kinds of economic activities that are closing down and sending workers home. Okay, so we have one last question regarding migrant labourers and then we'll go back to oil prices. We have a question from Afraha Nasir and she's asking your opinion on how do you foresee the future of migration or migrant labourers in the Gulf countries in the next 10 years in light of the COVID-19 and also the fiscal consolidation policies of the GCC countries? I think it's really, it's a very, I mean, that's an excellent question and it's a difficult one to kind of predict with any certainty because of all of the great uncertainties we have at the moment. I do think though that there is no simple policy solution that the Gulf states have, you know, you mentioned earlier these kinds of gulfisation programs, satirisation and emerythisation of the workforce. I think it's extremely unlikely that those programs will have any kind of lasting success precisely because these are countries that are built upon a cheap disposable migrant workforce. That's not to say there will not be an increased proportion here and there in certain sectors of citizen labour in parts of the private sector, but I think in the bulk of the population it's unlikely that we're going to see a significant change. Now, this is, I think, very important, I think, to kind of put up in how we approach the area because, I mean, as I'm sure many people are aware, the kind of widespread abuses that we see against migrant workers, they're not going away, they're receiving a lot of increased attention, I think, at a global level, particularly again associated with the World Cup. So, I think that's something that we're going to see more and more attention and spotlight up upon. Okay, thank you. Now we have a question from Andy on oil prices. So, he's asking about when would it be or do you think that oil prices will rise or fall from their current position maybe, let's say, this year? Yeah, again, it's a difficult one to predict. I think there's little doubt, certainly for the rest of 2020, that oil prices will remain low and that's what all the predictions are saying. They may, you know, as I said, I think the Brent is around $34 at the moment. It was around $20 at the end of April. It may, you know, may rise a little bit in that moment, over the rest of the year. But I think in general, particularly because we are heading into, and there's no doubt about this, I think that we're heading into a major economic global downturn, that and in those kinds of moments oil prices tend to be, I think, will remain low because of the reduced kind of economic activity. But this is, I think, really looking a little bit further in advance. This is a really important point. One of the consequences of this pandemic and the drop in the oil price has been a real scaling back of expenditure around exploration and production. It's called E&P, which is the sector of the oil market that looks for new deposits or develops and builds these kinds of extraction. Now, there's been a drop. I was looking at some figures the other day. It's around about the levels of what it was in the 1970s. A very dramatic drop in this expenditure. And what that means, because oil and energy production takes a lot of lead in time, it's not a simple process that could be turned at a dime. It can't just be switched on and off. So what this means, and a number of some of the bigger financial firms, industry analysts are speculating that we might actually see a kind of a whipsaw effect, where because of this lack of investment in currently and probably for the rest of this year, that moving to next year and later, we might actually see prices spike again. The previous oil price peak was mid-2014, when the oil price hit, it was around $140, $114, I think it was a barrel in about June 2014. Some people are predicting that because of this restriction in investment and production and exploration that we might see another kind of spike once the market tends to, once the demand increases again. Okay, but also regarding oil prices, now we've seen that there is a great demand shock in the markets. And demand is unlikely to go back to its pre-COVID-19 levels this year or maybe next year, I don't know, I'm not sure how many years we can wait until we go back to their pre-COVID-19 levels. Do you think like, OPEC and OPEC countries can work together to bring the prices to something they can agree on just purely on a coordinating supply? I mean, this is, it goes back to the point that I was making earlier around, you know, the supply, question of supply earlier this year and this agreement that was, see, what happened in the last drop in the price of oil, which was end of, basically from mid-2014, I mentioned the price hit a peak and then there was a steady decline through 2015 and 2016. What happened in early 2016, the price hit around $20 a barrel. And what happened at the end of 2016, December 2016, up until March of this year, there was a coordinated agreement between Saudi Arabia, leading unofficially the head of OPEC and then Russia, leading unofficially the non-OPEC oil producing state. So there was an agreement called OPEC+, where these two states agreed to coordinate production limitations of oil and they did this in order to try to restrict supply and therefore keep the price of oil at a relatively buoyant level. So that's what collapsed in March 20, sorry, in March 2020, that agreement. Now, why did they do this? Why did from end of 2016 up until March 20, March 2020, they did this partly, I think, for their own interest because they wanted to see oil relatively healthy. But what this had the other, the unforeseen consequence to keep afloat, oil produces in the United States in the shale and fracking industries, which as I said needed a higher price of oil in order to survive. So they in a sense, because of this agreement, helped to support competitors in the oil industry. And it was actually, the United States became the world's largest producer of oil and it still is today. It overtook Saudi Arabia as the world's largest producer of oil. So that's why Russia, I think in particular, decided to walk away from that agreement in March 2020. Saudi Arabia quickly followed through. Now, what's happened then is that they have come back and tried to re-enter some kind of agreement on supply. I personally am skeptical that that will have a long-term or durable effect. I think the fact is that because of the economic collapse that we're in, there is inevitably, like in the case of the United States, inevitably a drop in the production of oil. So it's kind of like a reduction supply related to the kind of economic conditions that we're existing within at the moment. We have also a question on the modelling of oil prices. Do you think that the economic modelling and forecasting of crude oil prices takes into consideration the political and social institutional factors? Or is it just basically supply and demand? The situation is much more complicated than that. Yes, definitely. I mean, I fully agree. Obviously, it's important. Supply and demand is very important. But there's a whole lot of more complex reasons related to this, including the question of basically future expectations of prices and speculation on the price of oil, also in relation to storage capacities. So, I would wholeheartedly agree. It's not a simple question of supply and demand in that sense. Speaking of storage, do you think we will see another wave of negative oil prices? Again, we need to be, there's different parts of the oil market. I mean, when we saw negative oil prices, it was particularly the West Texas Intermediate oil, which was, which is U.S. oil, is landlocked. And so that was connected very much to the storage facilities in the United States, whereas there is the other other oil producing regions that have access to the sea. And perhaps we saw producers store oil on tankers also at that moment. So, the price effect was a little bit different for something like Brent, you know, the kind of international benchmark. Ah, okay. It's unlikely to happen to Brent, I guess. Yes. Going back to the region, we have a question asking about your thoughts on the impact of the fall of oil prices on a country like Iraq, for example. And it's difficult in the situation. Even in your article, you were saying it's very difficult to see how they address their fiscal deficit, to say the least. Yeah. I mean, that's absolutely true. I think Iraq, you know, other Nigeria is another oil producing state, which I think is going to, I mean, not pardon me at least, but a state that is an oil producer, oil exporter that's, that is going to be hit very differently, I think, than somewhere like the GCC states. You know, Iraq, for example, I think something like 90 percent, very, very high proportion of government revenues come from oil exports. And when you have such a high dependency on exports, and in a country where a lot of the population depend upon some kind of public, on the public sector in some way, it's really, you know, to see a drop in the price in this regard really is very, very significant. Now, what might happen, and, you know, there was, there was a bit of talk about this a couple of weeks ago about Iraq actually offering some of its infrastructure, oil infrastructure up for sale. And again, I think at that moment, there was a discussion about perhaps some Chinese firms entering into, into this. So, you know, we may see similarly in terms of distressed assets that I spoke about in other, in the United States, you know, perhaps some of these other major oil producers in the Middle East might also, we might see kind of a reshaping of ownership and power within that, within the oil industry in the region itself. So, I think that's, that could be one outcome. The other thing that I would say though, Iraq is very important in this respect is that we need to remember prior to the pandemic that we saw very impressive popular mobilizations taking place in the country through 2019, early 2020. You know, really movements that were, you know, tackling questions of poverty, repression, nepotism, tackling both the US presence as well as Iran's presence in the country. So, you know, I'm not sure that's, that's kind of a political question, I think, to see what's going to happen to those movements as we move out of the perhaps lockdowns and those things. Okay. Now, talking about the alternative energy production ways, do you think that maybe the world will go to these alternatives in a post-COVID-19 world, or are we reproducing the same old structures, as you said, like the big oil companies are just going to get bigger and more powerful? So, where does that leave us? I think when looking at a question like that, it's really important not to try to read automatically into the current situation, just because the price of oil has dropped so rapidly and quickly, just because all sectors of the oil industry and all producers are being hit by this fall in the price of oil, not to read into that any kind of automatic move towards renewable energy or long-term reduction in reliance on fossil fuels, or, you know, something that's necessarily pro or positive for the climate. Because for the reasons that I've outlined, we could actually see more of a consolidation and restructuring within the industry. What it comes down to, I think, is a political question. There's not an automatic economic outcome. So I think it's quite possible that, you know, if people, if there is movements to kind of really challenge the position of big oil, if there are movements to force back some of these measures that I spoke about in the United States around climate change, around pollution, the protesting of fossil fuel infrastructures, et cetera, if those things are able to gain traction and continue in a post-COVID context, then quite, we may see this look back at this moment as being something of a positive moment. But I think without that kind of political challenge and mobilization, there's certainly no sense or no indication that governments are going to take a long-term move in that direction. And that's specific to the United States, or do you see also the same pattern in the EU? I think it's also in the European Union. You know, we can see, as I mentioned, banks lobbying to get climate change stress tests taken off because of the special situation. You know, we can see, you know, various ways that oil industries are actually, you know, yeah, I don't think it might happen differently in Europe, but I certainly don't think that we should read this as being a necessarily pro-ecological moment. Because like the whole rhetoric I'm hearing right now from the Commission or even here in Germany is like we're going green after COVID-19. But what are the concrete policies no one knows yet. So we'll have to keep an eye on that, yeah, I guess. Now we have another country-specific question regarding the Algerian economy and its dependence on oil. So how do you see the future of the Algerian economy in light also of the protests throughout the last year continuing online right now and also this huge dependency on oil? Yeah, I mean, I think the, as I mentioned in the case of Iraq, the protests and localizations that were taking place right up until the pandemic hit, I think are going to be a big part of that. I haven't followed more recently details of the Algerian economy itself, but I do think, you know, it's very clear that there's great social disparity, social economic disparities in the country that those protests really reflective. And I think, you know, of all the countries you see, Lebanon, Iraq, Algeria, where we had these mobilizations prior to the pandemic, I think from what I've seen, Algeria is the place where there's been a lot of reflection and thinking about what to do, how to carry forward these movements. So, you know, yeah, I think that's really going to be key, but this is success or the ability of those movements to continue. Okay, so I have one last question or maybe we have another question regarding Nigeria, and then we'll go back to my last question on the GCC. So, regarding Nigerian economy and the recent IMF involvement as a result of miscellaneous revenues, you're also talking about colonial legacies in these countries, them from dealing with the implications of the crisis, maybe you can elaborate a bit. Yeah, I think that's, I mean, it's a very good question. I think one of the things we're seeing, you know, is places like Nigeria, other places that are not necessarily oil exporting countries, partly in response to the pandemic, we are seeing IMF and the World Bank re-enter these countries in terms of lending, and that these loans are still continuing to be tied to structural adjustment measures. So, I haven't followed the Nigerian case closely, but I know, for example, in the case of Pakistan, not an oil producer, but a case of Pakistan where we see the IMF recently negotiating, I think it was a, I forget the figure, but a very large multi-billion dollar loan that basically recommitted the country to range a structural adjustment measure. So, I think that's clear that post, in this moment of the pandemic that we're seeing intensification of these international financial institutions. Of course. So, my last question is regarding, again, GCC countries and the austerity measures they are implementing nowadays and their implications on the conflicts in the region, like the war in Yemen, Libya, and Syria, and also supporting a dictatorship as brutal as the GCC in Egypt. Do you think that we can see some change coming from GCC countries spending less on fueling conflicts in the region? I, again, I wouldn't read an automatic just because, you know, perhaps the fiscal pie is smaller than what it was. I wouldn't necessarily... Can you hear him or did we lose him? Can you hear me? Yes. Sorry. So, what I'm saying is I don't think we should read, again, this kind of automatic just because the oil price is low, read this kind of lessening of the GCC's involvement in these regional conflicts. I actually think that, you know, it's very clear the last decade the GCC has been a main regional protagonist in all of the cases that you mentioned and further afield. I don't think that's going to change. It may change form. It may be with less money to operate with, but I do think that the... There's a lot... The GCC is really, you know, attempting to and has been attempting to maneuver in the region and create its own kind of hegemonic project in the region since the Arab uprisings. And I don't think that's going to change. Let's wait. Unfortunately. Not the answer I wanted to hear. Okay. Thank you so much, Dr. Haniat. It was a pleasure to talk with you. Thank you for our audience. I think the video will be online in the coming few days. And we have Mary. I think I should unmute you. She wants to make an announcement. Where are you? This one. I can't see you. I don't see Mary. Okay. I will make the announcement instead of Mary. That's... The next event will be on Wednesday at 3 p.m. with Dr. Kristen Perry, who will be speaking about COVID-19 and resource exporting economies. So this is basically for everyone in our talk today. Thank you so much again. And hopefully we'll see you soon in another talk. Thank you, everyone. Thank you. Ciao. Thank you. Bye.