Oil markets have had quite a year. April 2020, the beginning of Kuwait’s fiscal year 2020/2021, saw the Gulf state facing a dramatic collapse in government revenues for the year ahead. The unexpected implosion of the international production quota agreement underpinning oil prices since 2016 in early March, coupled with the shutdown of the world economy in the wake of the Covid pandemic, sent the price of oil — which is responsible for 80% of government revenues — plunging to its lowest level for 17 years.
Fast forward a year, and the bulls are back. Not only are global suppliers once again singing from the same hymn sheet, but the prospect of a resurgence in the global economy on the back of vaccine rollouts has led to forecasts of prices returning to levels not seen since the peaks of 2014. Such rises are far from certain, however, with the vulnerabilities of the market likely to become more pronounced as prices rise.
