Oil Prices Fall More Due to Trade Problems and Saudi Arabia Lowering Crude Prices
Oil prices kept dropping on Monday after Saudi Arabia cut the price of its crude. This happened as trade tensions grew, making people more worried about a global recession and lower demand for energy.
Oil Prices
As of 7:23 a.m., Brent crude oil dropped 2.5% to $63.9 per barrel, and US West Texas Intermediate (WTI) crude went down 2.6% to $60.4 per barrel.
Saudi Aramco, the government-owned oil company, lowered the official selling price for its main Arab Light crude by $2.30 for May. The new price is now $1.20 more than the average price of Oman and Dubai crude, according to the company’s pricing document.
This decision came shortly after OPEC and its allies (known as OPEC+) announced a bigger-than-expected increase in oil production.
OPEC+ plans to add 411,000 barrels per day in May, which is much more than the previously planned 135,000 barrels per day.
Oil prices dropped 7% on Friday after China raised tariffs on US goods, worsening the trade war and increasing fears of a possible recession.
“The main reason for the drop is the fear that tariffs will slow down the global economy,” said Satoru Yoshida, an analyst at Rakuten Securities. He added that the planned increase in oil production by OPEC+ is also putting pressure on prices. More tariffs from other countries could make things even worse.
Tariff Dispute
On Friday, China said it would place a 34% tariff on all US imports starting April 10. This is a response to the new tariffs announced earlier that week by President Trump’s administration.
These back-and-forth tariffs could impact a trade relationship worth $582.4 billion in 2024, according to the US Trade Representative.
Although oil, gas, and refined products were not included in Trump’s new tariffs, the trade fight could still cause inflation, slow down the economy, and raise tensions — all of which could hurt oil prices even more.
Federal Reserve Chair Jerome Powell said on Friday that the tariffs are “larger than expected” and warned that they could lead to higher inflation and slower economic growth than originally thought.
Interesting Note
On Thursday, Goldman Sachs lowered its forecast for oil prices in December 2025. It now expects Brent crude to be $66 per barrel and WTI to be $62 — both $5 less than its previous prediction.
Published: 7th April 2025
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