New Delhi: Crude oil prices have seen an unprecedented decline over the past two days following the announcement of tariffs by President Donald Trump and China’s retaliatory tariffs, plunging by nearly 13%. Weekly declines of more than 10% mark the largest one-week drop seen in two years – this drop bringing prices to their three-year low – with Gulf countries’ crude falling to $65 per barrel and U.S. crude dipping below $62 per barrel, respectively.
Crude oil has reached just Rs 35 per litre – cheaper than soft drinks like Coca-Cola and Pepsi! Unfortunately, Indian fuel prices remain above Rs 100 per litre even as global prices drop significantly; an annual decrease of just 2 rupees occurred back in March 2024 but since then these costs have barely changed at all.
On Friday, oil prices dropped 7% and hit their lowest point in over three years as fears over an economic slowdown increased in response to China’s announcement of additional tariffs for U.S. products starting April 10 – leading to further drops in natural gas, soybeans and gold prices as well as global stock markets experiencing declines.
Brent crude oil ended at $65.58, representing a drop of 4.56 or 6.5% and U.S. West Texas Intermediate (WTI) crude fell 4.96 or 7.4% to end at $61.99 per barrel – at their lowest levels during the session, Brent was priced at $64.03, while WTI dropped to $60.45, representing their lowest points since 2004. Over the last week and two days alone, Brent prices have seen their largest percentage loss ever, 11.6%; U.S. crude prices experienced their largest weekly decrease ever with a 10.6% fall.
Calculations reveal that crude oil prices have now reached levels comparable to those of soft drinks. Gulf Country crude oil now costs $65.58 per barrel, or approximately Rs35 per litre when converted. A bottle of Coke or Pepsi typically costs Rs 65 in India – further highlighting just how affordable crude oil has become on an international level.
Experts predict that crude oil prices could continue to decline further. According to Scott Shelton, an energy specialist from United ICAP, prices may now be closer to their fair value barring any dramatic drops in demand. Shelton predicts WTI prices could fall as demand weakens further due to global economic challenges and US President Trump’s new tariffs may push inflation higher and slow economic growth, signalling potential difficulties ahead for U.S. economies.
As further pressure on oil prices, the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+) announced plans to raise production targets, hoping to bring 411,000 barrels per day back onto the market by May compared with 135,000 as previously planned.
Analysts expect the sharp decline in oil prices could result in reduced fuel costs in India, according to current projections. They predict an estimated reduction of Rs20 to Rs25 per litre across both petrol and diesel prices over time. Anuj Gupta of HDFC Securities noted that oil prices could potentially drop even further and oil marketing companies should pass along these benefits directly to consumers but warned the reintroduction of the windfall tax might lessen this reduction significantly.
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