LONDON — Oil prices fell by more than 20% in 2020, weighed down by the COVID-19 pandemic which undermined consumption around the world and despite a rebound in prices at the end of the year.

On Thursday, the European benchmark, Brent, traded for US$51.26, down 22% from December 31, 2019.

This is the worst drop since 2015, although in 2018 crude prices had already fallen by 19.8%.

At the start of the year, investors were instead worried about geopolitical tensions in the Middle East, which threatened to disrupt production and send prices soaring.

After the assassination in Baghdad of the Iranian general Qassem Soleimani in an American raid, and firing of Iranian missiles in retaliation, Brent had soared to 71.75 $US.

But gradually, the COVID-19 outbreak in China has turned into a pandemic. The hitherto gradual drop in prices accelerated on March 6, when a conflict broke out within OPEC+, bringing together the Organization of the Petroleum Exporting Countries and its allies, including Russia.

The two heavyweights of the alliance, Russia and Saudi Arabia, the world's second and third largest producers respectively, waged a brief but intense price war which resulted in a sharp drop in prices.

On April 20, for the first time in its history, the price of the American reference, the WTI, went into negative territory.

The US benchmark will drop to -US$40.32 as investors are forced to pay to get rid of their barrels, stuck with no buyers and an inability to take delivery and store them.

Brent crude hit its lowest point for the year two days later, at US$15.98 a barrel, a price not seen for more than twenty years.

Since then, prices have recovered without returning to their pre-pandemic level. Beginning in early November, successive announcements of COVID-19 vaccines prompted investors to buy oil, betting on a recovery in demand to come.