Crude prices drop to $65, lowest since 2021
This week, oil prices fell sharply to $65 per barrel after the US imposed new import tariffs and OPEC+ unexpectedly increased supply, wiping $10 off global benchmarks.This came after a brief rally last week, when US President Donald Trump announced tariffs on countries that buy Venezuelan crude oil, tightening supply and driving up prices.
Oil prices fell sharply on Friday, with Brent oil plummeting below $65 per barrel, its lowest level since August 2021.
According to Oilprice.com, the decrease was caused by a variety of reasons, including former President Trump's new import tariffs, OPEC+'s poorly timed decision to speed the rollback of production limits, and retaliatory steps by China. Together, these developments reduced the price of a barrel by $10, bringing ICE Brent below $65 for the first time in nearly four years.
The US West Texas Intermediate crude futures fell $4.96, or 7.4 percent, to close at $61.99.
"With backwardation barely changing from the beginning of the week, one could conclude that US tariffs are the defining factor for the price change. Nonetheless, this week will be remembered as a low point in oil market history," according to oilprice.com.
China's retaliatory tariffs on US exports have exacerbated the continuing trade war, pushing investors to forecast a worldwide recession.
China, the world's largest oil importer, has declared that it will levy 34% extra taxes on all U.S. goods beginning April 10.
According to Reuters, governments throughout the world are considering responses after former President Donald Trump raised tariffs to their highest levels in almost a century.
Aside from taxes, the Organisation of Petroleum Exporting Countries and Allies' decision to move forward with output increases pushed oil prices upward.
The group now intends to restore 411,000 barrels per day to the market in May, up significantly from the previous objective of 135,000 bpd.
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