Crude oil prices dropped to $30 per barrel on Monday amidst an ongoing coronavirus outbreak and price war between Saudi Arabia and Russia.
This is the lowest point in more than four years as investors fear that a global recession is imminent.
At 2:30pm on Monday, Brent crude, which is the global benchmark of crude oil, was trading at $30.23 while US West Texas Intermediate traded at $29.05 per barrel.
Commodity-dependent economies like Nigeria will be affected as revenue projections and budgets would have to be cut.
Already, President Muhammadu Buhari has appointed a committee to review the impact of the coronavirus outbreak and fall in crude oil prices on the economy,
The committee comprises of Godwin Emefiele, governor of the Central Bank of Nigeria (CBN); Zainab Ahmed, the minister of finance, budget and national planning; Mele Kyari, the group managing director of the Nigerian National Petroleum Corporation (NNPC); Clement Agba, the minister of state for budget and national planning.
Zainab Ahmed has already said the 2020 budget and its projections will be cut and the committee will determine to what extent the cut would be.
Goldman Sachs had previously warned that Brent crude price could drop as low as $20 per barrel over the next few weeks.
After Russia failed to consent to additional cuts proposed by the Organisation of Petroleum Exporting Countries (OPEC) and in response, Saudi Arabia, the world’s largest crude oil producer, announced that it would offer discounts on every barrel of crude oil bought.