An unheard of news on April 21: West Dedian Lightweight Crude Oil Futures, which was delivered in May, plummeted, and actually closed at $ 37.63 per barrel.
Although a considerable part of this is the factors of funds speculation, the fact that the incomparable fact is that the price of crude oil has been fluctuating nearly $ 15 per barrel in the past few days.The $ 15 should be significantly lower than the cost of production of most crude oil. This is a situation that all oil export countries, which are specific to the situation that each oil production company does not want to see.
Due to the outbreak of the crown disease, many countries have implemented blocking measures, and the economic activities of the entire world have obviously slowed down.It is estimated that the demand for crude oil around the world is about 100 million barrels per day from normal times, a decrease of about 30%, that is, 30 million barrels.This data is public, and each oil output country understands the current situation today.However, after several times such as Saudi Arabia, Russia, and Oil Exporting Country Organization+(OPEC+), and coordination of production reduction and coordination, in the end, it only reached an agreement to reduce production by 10 million barrels.
Everyone may think that even primary school students understand that you are producing at full load, selling 100 barrels at $ 15, it is better to reduce production by half and sell 50 barrels for $ 40, the latter is at least more profitable.So why is the oil output country unwilling to reduce production?The author does not talk about the political factors here. In addition, technically, the oil well is really not as easy to switch as the faucet in our family.The author only wants to talk about this issue briefly from the theory of economics.
Prisonerrsquo; S Dilemma is a game theory model proposed by Rand Corporation in 1950.Two people who made crimes were put in prison and could not communicate with each other.If both people do not reveal each other, because the evidence is insufficient, everyone will go to jail for one year; if one person is revealed and the other is silent, the revealed person will be released immediately because of his work.It was revealed to each other, and because of the conclusive evidence, both were sentenced to eight years.
Because the prisoner could not trust each other, he tended to expose each other, instead of being silent, and was sentenced to eight years in the end.The profound problem reflected in the predicament of the prisoner is that the individual rationality of human beings (personal interests in economic activities) may lead to collective irrationality (full losses in economic activities).
Win -win cooperation, fighting all the time, the current oil producing countries are standing in their own position. They are afraid that they will reduce production and the other party will not reduce production. As a result, their own crude oil export share will be affected.But over -protect yourself, calculate others, count, and eventually count on your own head.
Of course, some people may have to question that free market economic activities do not need to intervene in too much.The price of oil is reduced, and the cost price is too low. Naturally, there are manufacturers closed down, and the supply and demand and price of crude oil will return to normal.The author also advocates the survival of the survival of normal economic activities, but under the serious crown disease epidemic today, the laissez -faire market economy may not be a reasonable survival of the fittest.In the end, irrational was forced to discontinue production and layoffs, causing thousands of families to suffer a double blow to viruses and unemployment.After the epidemic, the situation of finding oil everywhere and an irrational increase in oil prices may occur.
The assumptions in the prisoner's predicament are unable to communicate with each other, stand on their own position, and understand each other.In today's world, the information is open and transparent, and the communication is unimpeded.In the past, the warnings that will be severely insufficient in the market will appear in the market many times, but the country of oil exports is ignored, and many coordinations are unsuccessful.Oil prices finally fell to today's price. I have to say that the global cooperation that everyone has been advocating for so many years has only stayed on the surface.If we worsen the sentence in the prisoner's dilemma or even changed to the death penalty, it is really the organ that is too clever and misunderstood Qing Qing's life.
The author works at Dadal, France
Responsible for the market development work in the special polymer Asia
