Oil prices experienced a sharp decline this week, dropping to $65 per barrel, the lowest level seen since 2021. This significant fall in crude prices comes as a result of several global economic factors, including new import tariffs imposed by the United States and an unexpected increase in oil supply from OPEC+ nations. These developments combined to erase $10 per barrel from global oil prices.
While oil prices had shown signs of recovery last week following the announcement by U.S. President Donald Trump to impose tariffs on any country importing crude from Venezuela, the market took a downturn as of Friday. Brent crude, a global benchmark, slid to $65 per barrel, marking the first time it had reached such low levels since August 2021.
The dramatic price fall is attributed to the combined impact of Trump’s import tariffs, an unexpected decision by OPEC+ to accelerate the unwinding of production cuts, and retaliatory actions from China. According to oilprice.com, these factors collectively caused ICE Brent to dip below the $65 mark, a sharp contrast to previous market conditions.
In addition to this, US West Texas Intermediate (WTI) crude futures experienced a notable decline, losing $4.96, or 7.4 percent, to close at $61.99 per barrel. Analysts observed that while the market had initially shown some stability, the tariffs imposed by the U.S. on oil imports from Venezuela seem to have played a central role in driving the price changes. Oilprice.com remarked that this week’s developments would likely be remembered as one of the more tumultuous periods in recent oil market history.
Adding to the market’s woes, the ongoing trade war between China and the United States escalated with China’s announcement that it would impose additional tariffs of 34 percent on all U.S. goods, starting from April 10. As the world’s largest oil importer, China’s actions have further heightened investor concerns, increasing the likelihood of a global recession.
Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) and its allies also contributed to the market downturn. The group unexpectedly decided to fast-track their plans to raise oil output, now aiming to increase production by 411,000 barrels per day in May, a significant revision from the earlier target of 135,000 barrels per day. This increase in oil supply has added additional pressure to an already fragile market, exacerbating the slump in global oil prices.
With these multiple global factors weighing heavily on the oil markets, the outlook for crude prices remains uncertain, and further volatility is expected in the coming weeks.
