On September 9, the world crude oil futures market collapsed. Brent crude oil futures in London fell 30% at the beginning of trading, hitting a minimum of $31.02/barrel, and New York light crude oil futures reached a minimum of $27.96/barrel, falling 32% after closing down 10.07% on Friday. Statistics show that this is the most serious shock in the world oil market since the 1991 Gulf War. The collapse of oil price also triggered the international financial market. Major stock markets in the world including European and American markets fell in an all-round way. The S & P 500 index even triggered the circuit breaker mechanism. The great "black swan" came for a reason.

The direct cause of the great panic in the international market is that the organization of Petroleum Exporting Countries (OPEC) and non OPEC oil producing countries headed by Russia failed to reach an agreement on the crude oil production policy after the end of March this year. In fact, Russia refused Saudi Arabia's demand for production reduction. This means that the production limit and price protection alliance between Saudi Arabia and Russia formed in 2016 is completely broken. Starting April 1, oil producing countries will no longer be subject to production caps or cuts.

If it's not expected that the talks will break down, then Saudi Arabia's actions will further shock the market. Saudi Arabia unilaterally announced that the price of crude oil sold to Europe, the Far East, the United States and other markets would be greatly reduced from the 7th, with the discount rate reaching the highest level in nearly 20 years. At the same time, Saudi Arabia also hinted that it would increase production if necessary, even reaching a record level of 12 million barrels / day. It is obvious that Saudi Arabia's heavy attack was premeditated. In the face of such naked threat of price war, Russia is not willing to be outdone. It immediately announced that the Russian government has a wealth fund of 140 billion US dollars, enough to support the low price of 25-30 US dollars per barrel of oil in the next few years. Market analysts said that it has long been said that Russia does not agree to reduce production, and Saudi Arabia is also dissatisfied. The two countries are now fighting each other. For example, if two giants break into a porcelain shop, they will only leave the scene of disaster.

An emergency may cause a panic for a while, but what really determines the market price depends on the relationship between supply and demand. There have been times in history when oil supply was in short supply due to geopolitical crisis or war, resulting in a sharp rise in oil prices. At present, the world oil price just falls into the so-called "demand trap", which shows that the expected demand is insufficient, but the supply is increasing, and the oil price shows a continuous break down. The United States, Brazil and other countries continue to increase production, and Guyana and other new oil and gas blocks are put into production, which also affects the ownership of international oil market share. The market has long predicted the potential oversupply this year.