Crude oil prices have witnessed a sharp decline, dropping nearly $10 per barrel in just one week, following the Trump administration’s announcement of tariffs on certain countries.
Although the oil and gas sector is exempt from these tariffs, concerns over inflation, slowed economic growth, and intensified trade disputes have contributed to the price drop. Brent Crude Oil, which was trading at $72.94 per barrel, has witnessed a 7% drop to $65.58 per barrel on Sunday. West Texas Intermediate (WTI) Crude Oil was $61.99 per barrel, dropping almost 7.41%. On Friday, crude oil prices crashed 7% to reach their lowest point in over three years. This decline is attributed to China’s decision to impose tariffs on US goods, escalating the trade war and increasing the likelihood of a recession. For the week, Brent crude oil prices fell 10.9%, marking their largest weekly loss in a year and a half, while West Texas Intermediate (WTI) prices dropped 10.6%, their biggest decline in two years.
The Organisation of Petroleum Exporting Countries (OPEC+) has announced plans to increase output, aiming to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd. This decision has further pressured oil prices.Additionally, a Russian court’s ruling that the Caspian Pipeline Consortium’s (CPC) Black Sea export terminal facilities should not be suspended has also contributed to the price drop, as it may prevent a decline in Kazakhstan’s oil production and supplies.Goldman Sachs has lowered its forecast for Brent crude oil’s average price this year by 5.5% to $69 per barrel and for US WTI prices by 4.3% to $66 per barrel. Meanwhile, it won’t have any impact on the domestic market as the price of petrol and diesel have not changed.