Oil markets have been on a roller coaster this year, with prices recovering moderately in January, only to decline to half of these levels in March. Oil’s dramatic plunge didn’t stop there as the coronavirus pandemic battered demand.
A key benchmark, the West Texas Intermediate – a blend of US crude grades – took a dive below zero on April 20, trading at -$40 per barrel at one point. The month, which saw severe mobility restrictions globally to counter the coronavirus outbreak, was described as ‘Black April’ by Fatih Birol, executive director of the International Energy Agency.
With ground and air transportation at a virtual standstill and people confined to their homes to limit the spread of the virus, the price of oil was close to being worthless, endangering tens of thousands of jobs that depend on vital sector.
However, WTI took a 360 degree turn, rising to above $40 per barrel in today's opening session after Opec+ extended its 9.7 million barrels per day curbs by another month. Here's why oil remains so volatile and the factors behind its ebb and flow.
Demand-supply fundamentals
The biggest determinant of oil prices today is the mismatch between demand and supply. The 2014-16 price crash exposed a glut in the market from the spectacular increase in production from the US shale basins. At the same time, demand in many of the developed economies peaked. However, the developing world, led by the rising economies of China and India continue to drive crude demand growth.
With growth in China set to moderate and Beijing and New Delhi looking to add more electric vehicles on the road, their continued demand for more oil is expected to peak as well.
"Oil prices compared to other commodities are more volatile because there is much uncertainty on the supply and the demand side of oil,” said Garbis Iradian, chief Mena economist at the Institute of International Finance.
While supply corrections are already underway by way of an historic output cut pact endorsed by Opec and producers outside the group, there is still much uncertainty left in the markets.
“When we approach November-December, some experts say there could be higher cases of Covid-19. But overall, the second half of this year will be much better than the first half, so there is much uncertainty, and when you have a lot of uncertainty, [you have] volatility,” said Mr Iradian.
Technology and shale’s rise as swing producer
The rise of independent shale producers in the US heralded a new dawn for oil. Gone were the days when the markets worried about the stability of oil production in the Middle East and the various geopolitical risk factors associated with it.
Shale, proved far more responsive to oil’s fluctuations, with drillers adapting to the market environment by innovating new technology to help ride the storm in prices.
Amit Bhandari, a fellow of energy and environment studies at Mumbai-based think tank Gateway House, credits the evolution in upstream technology, notably hydraulic fracturing, as the reason for its stellar rise. He also compares its rise to the sentiment in the 1907s-80s when the discovery of Venezuelan heavy oil reserves were not considered “conventional oil” but later became more accepted as technology evolved.
"If the prices rise, enough research goes into extracting this non-conventional resource [shale]. If the price goes up, we’re likely to see a return of this happening,” he said.
What about geopolitics?
Geopolitics remained the biggest mover of the price of oil for decades. Any threat or disruption to the movement of crude tankers along the Strait of Hormuz would sound alarm bells for the oil markets, setting off a rally in prices.
However, simmering geopolitical tensions in the Middle East last year, which resulted in multiple attacks on tankers along the world’s most congested and only passage from the Arabian Gulf to the open ocean, as well as a stunning attack on Saudi Arabia’s oil facilities that temporarily wiped out 5 per cent of global supply, barely moved the needle on price.
Tensions between the US and Iran following Washington’s assassination of top Iranian commander Qassem Soleimani in January, did not quite cause the stir that traders were anticipating, either. Mr Bhandari believes that geopolitics stopped being a major factor fuelling oil’s volatility between 2010 and 2015, following shale’s gradual rise in 2009.
"If you go back to 2005 or 2006, even a fraction of that [recent events] would’ve have pushed the price of oil up by $10 to $20 a barrel – no questions asked – but in the current market, it was just taken in stride,” said Mr Bhandari.
Geopolitical sentiment is unlikely to play a significant role in the future, as long as shale producers are able to rise to the challenge of higher prices by adding more rigs and upping production.
"Sentiment used to play a big play when we had a big problem but it is no longer the case now,” said Mr Bhandari.
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
Tips for avoiding trouble online
- Do not post incorrect information and beware of fake news
- Do not publish or repost racist or hate speech, yours or anyone else’s
- Do not incite violence and be careful how to phrase what you want to say
- Do not defame anyone. Have a difference of opinion with someone? Don’t attack them on social media
- Do not forget your children and monitor their online activities
More from Rashmee Roshan Lall
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The specs
Engine: 4.0-litre V8
Power: 503hp at 6,000rpm
Torque: 685Nm at 2,000rpm
Transmission: 8-speed auto
Price: from Dh850,000
On sale: now
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ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
UAE currency: the story behind the money in your pockets
Tell Me Who I Am
Director: Ed Perkins
Stars: Alex and Marcus Lewis
Four stars
The bio
Favourite book: Kane and Abel by Jeffrey Archer
Favourite quote: “The world makes way for the man who knows where he is going.” - Ralph Waldo Emerson, American essayist
Favourite Authors: Arab poet Abu At-Tayyib Al-Mutanabbi
Favourite Emirati food: Luqaimat, a deep-fried dough soaked in date syrup
Hobbies: Reading and drawing
Cricket World Cup League 2 Fixtures
Saturday March 5, UAE v Oman, ICC Academy (all matches start at 9.30am)
Sunday March 6, Oman v Namibia, ICC Academy
Tuesday March 8, UAE v Namibia, ICC Academy
Wednesday March 9, UAE v Oman, ICC Academy
Friday March 11, Oman v Namibia, Sharjah Cricket Stadium
Saturday March 12, UAE v Namibia, Sharjah Cricket Stadium
UAE squad
Ahmed Raza (captain), Chirag Suri, Muhammad Waseem, CP Rizwan, Vriitya Aravind, Asif Khan, Basil Hameed, Rohan Mustafa, Kashif Daud, Zahoor Khan, Junaid Siddique, Karthik Meiyappan, Akif Raja, Rahul Bhatia
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
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Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Profile of Foodics
Founders: Ahmad AlZaini and Mosab AlOthmani
Based: Riyadh
Sector: Software
Employees: 150
Amount raised: $8m through seed and Series A - Series B raise ongoing
Funders: Raed Advanced Investment Co, Al-Riyadh Al Walid Investment Co, 500 Falcons, SWM Investment, AlShoaibah SPV, Faith Capital, Technology Investments Co, Savour Holding, Future Resources, Derayah Custody Co.
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
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Neil Thomson – THE BIO
Family: I am happily married to my wife Liz and we have two children together.
Favourite music: Rock music. I started at a young age due to my father’s influence. He played in an Indian rock band The Flintstones who were once asked by Apple Records to fly over to England to perform there.
Favourite book: I constantly find myself reading The Bible.
Favourite film: The Greatest Showman.
Favourite holiday destination: I love visiting Melbourne as I have family there and it’s a wonderful place. New York at Christmas is also magical.
Favourite food: I went to boarding school so I like any cuisine really.
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
The rules of the road keeping cyclists safe
Cyclists must wear a helmet, arm and knee pads
Have a white front-light and a back red-light on their bike
They must place a number plate with reflective light to the back of the bike to alert road-users
Avoid carrying weights that could cause the bike to lose balance
They must cycle on designated lanes and areas and ride safe on pavements to avoid bumping into pedestrians
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
