Another big challenge just landed on the plates of policy-makers and leaders around the globe.

Already grappling with risks to their economies from the spreading coronavirus, cratering oil prices are infecting markets everywhere.

Brent crude dropped by almost a third to US$31 a barrel at one point today — the second-largest decline on record — after the breakdown in talks between OPEC and Russia on managing global supply saw Saudi Arabia kick off a price war.

Some stock indexes entered bear markets. Treasury yields tumbled, with the entire curve trading below 1 per cent for the first time in history. Markets are expecting the Federal Reserve to cut policy rates to 0 per cent in the coming months.

If oil stays low it’ll eventually eat through national budgets from Venezuela to Nigeria and Iran. Russia’s Vladimir Putin meanwhile has fired a shot across the bow of America’s shale revolution, with President Donald Trump’s repeated touting of U.S. energy self-sufficiency.

Cheap oil is in theory good for governments that bear a fiscal burden from fuel subsidies. And for big countries like China and India that rely on imports to grease their economies. Though less so for China if it also sees demand falter for its refined products.

The double punch from the virus and oil means policy coordination is ever more important, with a role for the global institutions that Trump has voraciously and frequently criticized. But so far leaders have struggled on that front. The arguing between big countries over crude supply could prove another constraint to keeping those lines of communication open.

And in the end, global financial instability isn’t good for any economy — nor potentially for the staying power of some leaders.

Global Headlines

Shutting down | China found it hard enough to quarantine a significant slice of its population due to the coronavirus outbreak, and it’s a one-party state with an iron-fisted grip on power. Italy’s efforts to lock down its industrial northern heartland (a region with around 16 million people) have been shambolic, adding to doubts over Prime Minister Giuseppe Conte’s already-tenuous hold on power.

Bracing for impact | The Trump administration is drafting measures — including a temporary expansion of paid sick leave and possible help for companies facing disruption — to blunt the economic fallout from the virus and help slow its spread, Saleha Mohsin and Jennifer Jacobs report.

  • Two Republican members of Congress will self-quarantine after contact with a person who later tested positive for the virus.

Climate of fear | Saudi Crown Prince Mohammed bin Salman’s dramatic actions — arresting close members of his own family and slashing crude prices in a bid to take on Russia — underscore the de-facto ruler’s own concerns about his grip on power. His actions suggest he’s not going to let anything get in his way, Sylvia Westall and Donna Abu-Nasr report.

Cementing his advantage | Joe Biden is poised to amass an insurmountable delegate lead by mid-March, leaving Bernie Sanders with little power to stop him from becoming the 2020 Democratic presidential nominee. As Gregory Korte writes, Biden’s well-placed to extend his advantage in nominating contests tomorrow and in some or all of the four states that vote a week later.

  • Coming up: Michigan, Missouri, Washington, Mississippi, Idaho and North Dakota vote tomorrow. Candidates debate March 15 in Arizona ahead of that state's March 17 primary.

Johnson’s curse | British Prime Minister Boris Johnson has been trying to deliver his first budget since November, but it’s been repeatedly derailed. As Tim Ross reports, first the Brexit turmoil and a snap election forced him to cancel it, then his finance minister quit and now the coronavirus is prompting yet another rewrite ahead of Wednesday's announcement.What to Watch This Week

  • Turkish President Recep Tayyip Erdogan meets European Union leaders in Brussels today over the burgeoning refugee crisis, while Greek Prime Minister Kyriakos Mitsotakis visits Berlin for talks with Chancellor Angela Merkel.
  • Betsy Duke, who took control of Wells Fargo’s board two years ago as part of the bank’s efforts to clean up a flurry of scandals, is facing calls to step down ahead of dramatic congressional hearings set for this week.
  • Official results in Israel’s third election in a year are due tomorrow, amid reports Prime Minister Benjamin Netanyahu fell short of a parliamentary majority.
  • Putin’s constitutional changes, including amendments that mention God and stipulate that marriage is a union of a man and woman, come before parliament this week.
  • Three Russian nationals and one Ukrainian will stand trial in the Netherlands for their alleged role in the 2014 downing of Malaysia Airlines Flight 17.
  • Guyana’s opposition is seeking an injunction to declare this month’s presidential election invalid, after more violence in the small South American country saw police shoot dead a protester.

Thanks to all who responded to our pop quiz Friday and congratulations to reader Sonia Leonard, who was the first to name Burundi as the African country where a commission is exhuming mass graves from post-independence turmoil. Tell us how we’re doing or what we’re missing at finally ... If Ukrainian President Volodymyr Zelenskiy thought he could breathe easy when Trump’s impeachment ended in an acquittal, he was wrong. First a cabinet revamp annoyed voters and spooked investors. Now Biden’s comeback on Super Tuesday has put the Republican spotlight back on the former vice president’s dealings with Kyiv. Silence has worked well for Zelenskiy in the past, but this time staying out of the fray may be harder.