The International Monetary Fund recently downgraded its outlook for the Middle East and Central Asia region in its latest regional outlook, stressing that the recovery in international oil prices could be difficult in the short term.

The IMF expects oil prices to hover between $40 and $50 a barrel in 2021. "In addition to the rise of alternative energy sources, the collapse in oil demand will weigh on prices," said Jihad Azour, director of the IMF's Middle East and Central Asia department.

In September, the International Energy Agency cut its forecast for global oil demand this year to 91.7 million BPD, down 8.4 million BPD from a year earlier. Meanwhile, Opec is more pessimistic that global oil demand this year is likely to be just 90.2 million b/d, down 9.5 million b/d from a year earlier.

For the Middle East and Central Asia, Jihad Azour said, greater economic diversification and continued security measures are the "best path" for countries in the region to emerge from the crisis.

But given that some of the most important non-oil sectors in the Middle East and Central Asia, such as tourism, transportation, retail and real estate, have also been hit by the epidemic, economic diversification will be a big challenge for countries in the region, the IMF report said.

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