Qatar's Al-Attiyah fears oil will fall below $20/b on OPEC price war, coronavirus

London — Qatar's former oil minister and OPEC president Abdullah bin Hamad al-Attiyah told S&P Global Platts on Monday he expects oil prices could fall below $20/b after OPEC and Russia failed to agree output cuts and with the global spread of coronavirus hammering demand.

"I saw the first shock and the first collapse and this is worse," Al-Attiyah, who was Qatar's longest-serving oil minister until he stepped down in 2011, told Platts in an interview. "My expectation is for oil to fall below $20/b. We have seen it before."

In Asian trade Monday, the May ICE Brent crude futures contract was trading around 26% lower at $33.51/b compared with Friday's settle, while the NYMEX April light sweet crude contract fell around 28% to trade at $29.82/b.

Al-Attiyah's remarks come after OPEC's Saudi-led plan for 1.7 million b/d of production cuts to be extended through 2020, with an additional 1.5 million b/d of reductions implemented by the end of June, was rejected last Friday by partner Russia. Riyadh's response has been to effectively launch a price war over the weekend by slashing the pricing of its oil exports for April, including the biggest cut ever for Arab Light crude for Asia.

"We now see another production war," warned Al-Attiyah, who attended his first OPEC meeting in the early 1970s and rose to be president of the organization, while overseeing Qatar's expansion to become the world's biggest exporter of LNG. "Saudi has now said it will increase but who will buy? China will call force majeure on gas and products."

Meanwhile, the International Energy Agency forecast on Monday a full-year reduction in demand of 90,000 b/d in 2020, the first annual fall since 2009.

"Everyone is now the loser," said Al-Attiyah in reference to the apparent price war.