Saudi Arabia sharply criticized Russia on Saturday over what it described as Moscow blaming the kingdom for the collapse in global energy prices, showing the tensions ahead of an emergency meeting of OPEC and other oil producers.
Oil prices sharply fell after the so-called OPEC+ group of countries including Russia failed to agree to production cuts in early March. A price war began soon after, with Saudi Arabia threatening to pump at a record-breaking pace to seize back market share even as the coronavirus pandemic saw demand sharply drop as airlines worldwide halted flights.
International benchmark Brent crude fell to around $24 a barrel, compared to prices of over $70 a year ago. Prices slightly have rebounded with President Donald Trump tweeting and talking about the need for a production cut, but rancor between Saudi Arabia and Russia could imperil a deal emerging from a planned teleconference Monday.
That anger could be seen early Saturday in two critical statements released by the kingdom's state-run Saudi Press Agency. The first came from Saudi Foreign Minister Prince Faisal bin Farhan under the headline: " Statements Attributed to One of Russian President's Media Are Completely Devoid of Truth."
"Russia was the one that refused the agreement, while the kingdom and 22 other countries were trying to persuade Russia to make further cuts and extend the agreement," the prince said.
He also said an alleged Russian contention that "the kingdom was planning to get rid of shale oil producers" was false as well. U.S. shale producers have made America one of the world's top producers, but they've been hurt badly by the price collapse. Trump has met with concerned producers about that.
Prince Faisal did not identify the story, nor the outlet he was critiquing.
A second statement came from Saudi Energy Minister Prince Abdulaziz bin Salman, one of King Salman's sons. The prince criticized Russian Energy Minister Alexander Novak by name for suggesting Saudi Arabia wanted to cut out shale producers.
The prince "expressed his surprise at the attempts to bring Saudi Arabia into hostilities against the shale oil industry, which is completely false as our Russian friends recognize well," the statement said.
Saudi Arabia's statements likely seek to defuse any possible confrontation between the kingdom and Trump, who tweeted Thursday that Moscow and Riyadh "will be cutting back approximately 10 Million Barrels" without elaborating. Trump's tweets and public comments have affected oil prices in the past.
Trade in medical products which have now been described as critical and in severe shortage during the COVID-19 crisis totalled about US$ 597 billion in 2019, accounting for 1.7 percent of total world merchandise trade, according to a new report.
The ten largest supplying economies accounted for almost three-quarters of total world exports of the products while the ten largest buyers accounted for roughly two-thirds of world imports.
The World Trade Organisation (WTO) Secretariat has released the new report on trade in medical products critical for the global response to the COVID-19 pandemic on Friday.
The report traces trade flows for products such as personal protective products, hospital and laboratory supplies, medicines and medical technology while providing information on their respective tariffs, according to WTO which deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Commitments made under various WTO negotiations and agreements have helped slash import tariffs on these products and improve market access, with the average tariff on COVID-19 medical products standing at 4.8 percent, lower than the 7.6 percent average tariff for non-agricultural products in general.
The statistics show that 52 percent of 134 WTO members impose a tariff of 5 percent or lower on medical products.
Among them, four members do not levy any tariffs at all: Hong Kong, China; Iceland; Macao, China; and Singapore.
The report, however, also identifies markets where tariffs remain high. Tariffs on face masks, for example, can be as high as 55% in some countries.
Germany, the United States and Switzerland supply 35% of medical products;
China, Germany and the United States export 40% of personal protective products;
Imports and exports of medical products totalled about US$ 2 trillion, including intra-EU trade, which represented approximately 5% of total world merchandise trade in 2019;
Trade of products described as critical and in severe shortage in the COVID-19 crisis totalled about US$ 597 billion, or 1.7% of total world trade in 2019;
Tariffs on some products remain very high. For example, the average applied tariff for hand soap is 17% and some WTO members apply tariffs as high as 65%;
Protective supplies used in the fight against COVID-19 attract an average tariff of 11.5% and go as high as 27% in some countries;
The WTO has contributed to the liberalization of trade in medical products in three main ways:
The results of tariff negotiations scheduled at the inception of the WTO in 1995;
Conclusion of the plurilateral sectoral Agreement on Pharmaceutical Products (“Pharma Agreement”) in the Uruguay Round and its four subsequent reviews;
The Expansion of the Information Technology Agreement in 2015.
Those products include: computer tomography apparatus; disinfectants/ sterilization products; face masks; gloves; hand soap and sanitizer; patient monitors and pulse oximeters; protective spectacles and visors; sterilizers; syringes; thermometers; ultrasonic scanning apparatus; ventilators, oxygen mask; X-ray equipment; other medical devices.
They are frequently mentioned by countries, international organizations and in news reports as the goods in short supply.
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Friday related to the global economy, the work place and the spread of the virus.
COSTS MOUNT: The pandemic will cost the global economy as much as $4.1 trillion, or nearly 5% of all economic activity, according to new estimates from the Asian Development Bank.
The head of the International Monetary Fund said the recession sparked by the coronavirus pandemic is "way worse" than the 2008 global recession. At a press briefing in Geneva on Friday, IMF managing director Kristalina Georgieva described the situation as "a crisis like no other."
AIRLINES: Delta Air Lines, American Airlines, United Airlines, Southwest and JetBlue said they applied Friday for their share of $25 billion in federal grants designed to cover airline payrolls for the next six months. None disclosed the amount they are seeking.
The grant money was part of $2.2 trillion relief bill approved last week. Delta's CEO says his airline is burning more than $60 million cash per day, and United's president puts it at $100 million a day. Airline revenue has cratered during the coronavirus outbreak. Delta carried 38,000 passengers last Saturday. On a normal Saturday in late March it flies 600,000.
The number of travelers screened Thursday at airports nationwide was 124,000, a 95% drop from the same day last year.
And the global airline industry passed a milestone Friday: Half of all passenger jets are now grounded as airlines cut flights sharply. Aviation-data firm Cirium said that with another 530 parked since Thursday, there are now 12,635 jets in service and 13,655 grounded. The number of commercial flights is down 75%, according to tracking service
The Transportation Department, meanwhile, said it is getting more complaints from consumers who say airlines are giving travel vouchers instead of refunds after canceling flights. The department says vouchers aren't easy to use because airlines are cutting so many flights due to the coronavirus outbreak. Airlines can offer vouchers — and usually do, even in normal times — but the Transportation Department said it is reminding carriers of a longstanding requirement to issue prompt refunds to passengers who want them.
SMALL BUSINESS: More than $875 million in loan applications had been processed through the new small business loan program, Treasury Secretary Steven Mnuchin said via Twitter, "almost all from community banks!" Mnuchin said in that tweet that big banks were also taking applications and would be submitting them shortly. However, there were signs that the program is off to a rough start.
CROWD CONTROL: Walmart still wants customers, just fewer of them at a time. The nation's largest retailer said it will now allow no more than five customers for each 1,000 square feet at a given time, roughly about 20% of the average store's capacity. To oversee the restriction, workers will mark a queue at a single-entry door, and direct arriving customers there, where they'll be admitted one by one. Walmart joins Target and others in trying to limit the number of customers in the store to curb the spread of the coronavirus.
HEAVY INDUSTRY: Toyota is halting production at five of its 18 plants in Japan as sales evaporate. The stoppage will last three days for most of the plants, but one plant will close until mid-April.
The affected plants produce vehicles for export, including Lexus luxury models and the Prius hybrid. Other Japanese automakers, such as Honda Motor Co., have also suspended production.
The U.S. auto industry is completely shut down.
CORONA SIDELINED BY CORONAVIRUS: The coronavirus pandemic is even closing the taps on Corona beer — along with most other brews across Mexico.
Major breweries announced Friday they are suspending operations in response to government orders for non-essential businesses to keep their workers at home.
Grupo Modelo, maker of Corona among other popular brands, said it will suspend its operations at plants around the country by Sunday. The company pointed out in a statement that thousands of farmers depend on it buying their grain. It said it has a plan that would allow it to continue production with 75% of its workforce at home if the government decides to allow it to continue operating.
Some Mexican states have also imposed dry laws that restrict the sale of alcohol during the health crisis.
MARKETS: U.S. stocks fell Friday, leaving the S&P 500 down 26.5% since its record set in February.
The losses came after the government reported that U.S. employers cut 701,000 jobs in March, the monthly decline in nearly a decade. Because of the timing of the spread of COVID-19, the March report did not capture the extend of the damage. Economists are warning policy makers to brace for worse.
ROUNDING IT OUT: The U.S. typically has a unique response to crisis, and the coronavirus is no different.
Firearm sales spiked 85% last month compared with the March last year, according an analysis of the FBI's National Instant Criminal Background Check System by Small Arms Analytics and Forecasting.
The laws of supply and demand also apply to arming up, of course, and the cost of adding guns the the shopping list will cost you.
"Much of the industry's inventory will have been depleted, so that we anticipate that weapons and ammunition prices increased as well," said Jurgen Brauer, SAAF's chief economist.
Data on prices will be released soon.
Coronavirus deaths mounted with alarming speed in Spain, Italy and New York, the most lethal hot spot in the United States, while the outbreak has thrown 10 million Americans out of work in just two weeks and by Friday had sickened more than a million people.
The public health crisis deepened in New York City, where one funeral home in a hard-hit neighborhood had 185 bodies stacked up — more than triple normal capacity. The city has seen at least 1,500 virus deaths.
"It's surreal," owner Pat Marmo said, adding that he's been begging families to insist hospitals hold their dead loved ones as long as possible. "We need help."
Worldwide the number of reported infections hit another gloomy milestone — 1 million, with more than 53,000 deaths, according to a tally kept by Johns Hopkins University. But the true numbers are believed to be much higher because of testing shortages, many mild cases that have gone unreported and suspicions that some countries are covering up the extent of their outbreaks.
Spain on Thursday reported a record one-day number of deaths, 950, bringing its overall toll to about 10,000, despite signs that the infection rate is slowing. Italy recorded 760 more deaths, for a total of 13,900, the worst of any country, but new infections continued to level off.
France recorded a running total of about 4,500 deaths in hospitals, with 471 in the past day. But officials expect the overall toll to jump significantly because they are only now starting to count deaths in nursing homes and other facilities for older people.
France's Prime Minister Edouard Philippe said he and his government colleagues are "fighting hour by hour" to ward off shortages of essential drugs used to keep COVID-19 patients alive in intensive care.
As the death toll grew, so did the economic fallout. New unemployment numbers showed the outbreak has thrown 10 million Americans out of work in just two weeks in the swiftest, most stunning collapse the U.S. job market has ever witnessed.
Roughly 90% of the U.S. population is under stay-at-home orders, and many factories, restaurants, stores and other businesses are closed or have seen sales shrivel. Economists warned unemployment would almost certainly top those of the Great Recession a decade ago and could reach levels not seen since the Great Depression in the 1930s.
"My anxiety is through the roof right now, not knowing what's going to happen," said Laura Wieder, laid off from her job managing a now-closed sports bar in Bellefontaine, Ohio.
The pandemic will cost the world economy as much as $4.1 trillion, or nearly 5% of all economic activity, the Philippines-based Asian Development Bank, said Friday.
At least a million people in Europe are estimated to have lost their jobs over the past couple of weeks. Spain alone added more than 300,000 to its unemployment rolls in March.
But the job losses in Europe appear to be far smaller than in the U.S. because of countries' greater social safety nets.
Estimates of those in China, the world's second-largest economy, who have lost jobs or are underemployed run as high as 200 million. The government said Friday it would would provide an additional 1 trillion yuan ($142 billion) to local banks to lend at preferential rates to small- and medium-sized businesses that provide the bulk of employment.
With more than 245,000 people infected in the U.S. and the death toll topping 6,000, sobering preparations were underway. The Federal Emergency Management Agency asked the Pentagon for 100,000 body bags because of the possibility funeral homes will be overwhelmed, the military said.
White House coronavirus task force coordinator Dr. Deborah Birx said U.S. infection data suggest Americans need to emulate those European nations that have started to see the spread of the virus slowing through strict social distancing.
The Trump administration was formalizing new guidance to recommend Americans wear coverings such as non-medical masks, T-shirts or bandannas over their mouths and noses when out in public and preserve medical masks for those on the front lines.
But there are still shortages of critical equipment, including masks, in Europe and the U.S.
Gov. Andrew Cuomo warned that New York could run out of breathing machines in six days. He complained that states are competing against each other for protective gear and breathing machines, or are being outbid by the federal government.
Trump invoked the Defense Production Act in hopes of boosting production of medical-grade masks by Minnesota-based 3M to assist first responders. Washington is also trying to crack down on a growing black market for protective medical supplies.
Nine leading European university hospitals warned they will run out of essential medicines for COVID-19 patients in intensive care in less than two weeks.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough. But for others, especially older adults and people with health problems, it can cause severe symptoms like pneumonia.
In a sign of the outbreak's impact on the U.S. military, the captain of a Navy aircraft carrier facing a growing outbreak of the virus was fired by Navy leaders who said he created a panic by sending his memo pleading for help to too many people. Navy Secretary Thomas Modly says the ship's commander, Navy Capt. Brett Crozier, "demonstrated extremely poor judgment" in the middle of a crisis.
Elsewhere among the world's most vulnerable, aid workers were bracing for a possible outbreak among more than 1 million Rohingya Muslim refugees living in cramped camps in Bangladesh.
And in a move likely to anger China, officials from the U.S. and Taiwan, the island claimed by Beijing as its own territory, held a virtual meeting Sunday to discuss ways of increasing Taiwan's international participation, particularly in the World Health Organization from which it is excluded at China's insistence.
World Trade Organisation (WTO) Director General Roberto Azevêdo and International Chamber of Commerce (ICC) Secretary-General John Denton on Thursday called for more dialogue with business to maximise the effectiveness of public policies to mitigate the economic damage resulting from the COVID-19 pandemic, particularly with regards to trade.
“We’re concerned about the severe disruptions to value chains in many sectors – with major implications for employment and the supply of goods, especially essential medical and food supplies,” they said in a joint statement.
The heads of WTO and ICC said business can play a key role in signalling where trade flows and production chains are being affected, helping to identify solutions that maximise health outcomes while minimising economic damage.
“It’s increasingly clear that the economic downturn caused by the pandemic will necessitate a significant rebuild of domestic policies – and of international cooperation,” they said. “Ongoing efforts to improve and strengthen the global trading system, including the WTO, must therefore continue.”
The two leaders welcomed governments’ efforts “to mitigate the pandemic’s effects on jobs and growth, and lay the foundations for a strong and inclusive recovery.”
To generate “constructive recommendations to governments on trade policy measures that can be readily deployed to speed the response to the COVID-19 pandemic in the immediate and mid-term”, they said the ICC would host a “virtual business roundtable” organised with its partners, as well as with support from the WTO.