A pump jack near Bakersfield, California, 2014
Lucy Nicholson / Reuters

The global oil market has never in history collapsed as precipitously as it has right now. The oil and gas industry, which provides almost 60 percent of the world’s energy, is engulfed in a double crisis that would have been dismissed as unthinkable at the start of this year. A price war, with producing nations battling for market share, has become lodged in the larger crisis of the novel coronavirus pandemic and what will likely be the worst recession since World War II. The resulting collapse in demand will be bigger than any recorded since oil became a global commodity. Oil prices are already down two-thirds since the beginning of 2020 and still falling. The decline in global consumption in April alone will be seven times bigger than the biggest quarterly decline following the 2008–9 financial crisis. In areas that lack access to storage and markets, the price of a barrel of

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  • DANIEL YERGIN, vice chair of IHS Markit, is the author of the forthcoming The New Map: Energy, Climate, and the Clash of Nations, as well as of The Quest and of The Prize, for which he received the Pulitzer Prize.
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