The Effects of OPEC Intervention on Indonesia on the Policy of Reducing Oil Production during the Covid-19 Pandemic

Abstract

The pandemic, which hit many countries in 2020, caused a crisis and created confusion for oil-exporting countries, including OPEC member countries, which were required to agree to an agreement on reducing oil production. The objective of the present study was to determine OPEC's intervention in the Policy of Oil Production during the Covid-19 Pandemic towards its member countries and to find out OPEC's intervention in the Policy of Oil Production during the Covid-19 Pandemic towards Indonesia. The authors applied a qualitative approach to compiling this study. In this study, the data collection was carried out by examining various sources such as books, electronic media, trusted websites, and relevant previous research. Based on research results, the Covid-19 pandemic that has attacked various countries has weakened industrial activities and created government policies that require physical distancing which reduces the demand for fuel oil. Therefore, OPEC issued a policy of reducing production to its members in the hope that prices would rise. The impact of the Covid-19 pandemic on the global oil and gas industry has also had an impact on Indonesia. Although fuel prices in many countries have fallen due to the impact of OPEC policies, there is a dispute in oil production between Russia and Saudi Arabia as well as the Covid-19 pandemic. However, the price of fuel sold by Pertamina to consumers has not changed and was not lowered at that time.