Q&A: LSU Energy Studies Director Explains What The Oil Crisis Means For Louisiana

“Betsy Shepherd: Can you give a summary of what happened as stock prices dropped and the role of oil in that stock market plunged?

David Dismukes: This is the consequence of some actions that started late last week and worked their way through the weekend. Now with this coronavirus, it’s raised some concerns about whether or not the market has been oversupplied. The Saudis were trying to get the Russians to come on board with an additional cut in production. The Russians didn’t want to play along with that, and the Saudis have taken an action of essentially wanting to play chicken with the Russians on this issue and decided that they’re going to be discounting their crude oil supplies and enhancing production and flooding the market to increase their own market share at the Russians expense. You take that into conjunction with what’s been going on with the coronavirus and the contraction of economic activity and the reduction of demand that we’ve seen over the last several weeks. That just makes for a catastrophic market for a commodity like crude oil.”