Biggest oil crash in 3 years: Reuters explains reason
Oil price has dropped by more than 6% (Photo: Getty Images)
On Thursday, April 3, there was a sharp decline in oil prices. This day recorded the most significant percentage drop since 2022, reports Reuters.
As the agency reports, the decline occurred after OPEC+ agreed to an unexpected increase in oil production. This happened the day after U.S. President Donald Trump announced the introduction of new large-scale import tariffs.
Thus, Brent crude oil futures closed at $70.14 per barrel, dropping by $4.81 or 6.42% (the price at the time of publication was exactly $70 per barrel).
Additionally, futures for American oil, West Texas Intermediate, closed at $66.95 per barrel, down by $4.76 or 6.64% (the price at the time of publication was $66.80 per barrel).
Reuters reports that the price of Brent crude oil is on track for its largest percentage drop since August 1, 2022, while the price of WTI oil is heading towards its biggest drop since July 11, 2022.
Earlier, at a meeting of ministers on Thursday, OPEC+ countries agreed to further develop the plan to increase oil production, intending to bring 411,000 barrels per day back to the market in May instead of the initially planned 135,000 barrels per day.
"The economy and oil demand are inextricably linked. Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices - potentially marking a new chapter in a volatile market," said Angie Gildea, head of the energy sector at KPMG in the US.
Reuters also added that oil prices changed by about 4% even before the meeting, as investors feared that Trump's tariffs would lead to an escalation of the global trade war, slowing economic growth and limiting fuel demand.
Trump's tariffs
It should be reminded that on Wednesday, April 2, US President Donald Trump announced tariffs against almost all countries in the world. China was the hardest hit.
For more details on how the tariffs work, the imposed rates, and how this will affect prices in Ukraine, read the article by RBC-Ukraine.
