ABSTRACT
The COVID-19 crisis had a significant impact on world oil producers. Within a welfare economic framework, Schmitz, A., C. B. Moss, and T. G. Schmitz. 2020. "The Economic Effects of COVID-19 on the Producers of Ethanol, Corn, Gasoline, and Oil."Journal of Agricultural & Food Industrial Organization 18 (2): 1-18, estimated that the minimum cost of COVID-19 in 2020 to world oil producers was roughly US$ 1 trillion. They used actual oil production data for January 1st, 2020, through June 30th, 2020, and forecast world oil production and prices from July 1st to December 31st, 2020. This paper extends the 2020 analysis using actual production and price data for 2020 and 2021 to calculate the change in producer economic rents during the COVID-19 pandemic for global oil producers (U.S., Russia, Saudi Arabia, and the Rest of the World). Despite losses in 2020 to world oil producers due to the COVID-19 pandemic, world oil producers saw significant gains in 2021, which more than offset losses in 2020. At a minimum, world oil producers realized a net gain of $US 829 billion over the two periods. © 2022 Walter de Gruyter GmbH, Berlin/Boston.
ABSTRACT
The COVID-19 crisis had a significant impact on world oil producers. Within a welfare economic framework, Schmitz, A., C. B. Moss, and T. G. Schmitz. 2020. "The Economic Effects of COVID-19 on the Producers of Ethanol, Corn, Gasoline, and Oil."Journal of Agricultural & Food Industrial Organization 18 (2): 1-18, estimated that the minimum cost of COVID-19 in 2020 to world oil producers was roughly US$ 1 trillion. They used actual oil production data for January 1st, 2020, through June 30th, 2020, and forecast world oil production and prices from July 1st to December 31st, 2020. This paper extends the 2020 analysis using actual production and price data for 2020 and 2021 to calculate the change in producer economic rents during the COVID-19 pandemic for global oil producers (U.S., Russia, Saudi Arabia, and the Rest of the World). Despite losses in 2020 to world oil producers due to the COVID-19 pandemic, world oil producers saw significant gains in 2021, which more than offset losses in 2020. At a minimum, world oil producers realized a net gain of $US 829 billion over the two periods. © 2022 Walter de Gruyter GmbH, Berlin/Boston.
ABSTRACT
The COVID-19 crisis created large economic losses for corn, ethanol, gasoline, and oil producers and refineries both in the United States and worldwide. We extend the theory used by Schmitz, A., C. B. Moss, and T. G. Schmitz. 2007. “Ethanol: No Free Lunch.” Journal of Agricultural & Food Industrial Organization 5 (2): 1–28 as a basis for empirical estimation of the effect of COVID-19. We estimate, within a welfare economic cost-benefit framework that, at a minimum, the producer cost in the United States for these four sectors totals $176.8 billion for 2020. For U.S. oil producers alone, the cost was $151 billion. When world oil is added, the costs are much higher, at $1055.8 billion. The total oil producer cost is $1.03 trillion, which is roughly 40 times the effect on U.S. corn, ethanol, and gasoline producers, and refineries. If the assumed unemployment effects from COVID-19 are taken into account, the total effect, including both producers and unemployed workers, is $212.2 billion, bringing the world total to $1266.9 billion. © 2020 De Gruyter. All rights reserved.