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India
Oil prices plunged sharply on Thursday, with US crude futures falling 7% to $66.52 a barrel, marking their worst day since July 2022 amid growing concerns that President Donald Trump’s escalating trade war could slow down the global economy and trigger a potential recession, CNN reported.
According to the report, Brent crude, the global benchmark, also experienced significant losses, tumbling 6% as investors reacted to the combination of geopolitical tensions and a surprise decision from OPEC+.
OPEC+ shocked the market by announcing that Saudi Arabia, Russia, and six other members of the oil cartel will accelerate previously scheduled production increases starting in May, a move that has further amplified concerns about an oversupply of oil, the report said.
Robert Yawger, Executive Director at Mizuho Securities, told CNN, “It’s a demand destruction event, and it’s going to disrupt the supply chain. The market is concerned about the threat of recession, inflation, and unemployment.”
The fears of an economic slowdown stem from the growing uncertainty around the trade war, with experts warning that if the conflict disrupts the global flow of goods and services, energy demand could suffer significantly, particularly in sectors that depend on oil.
While falling oil prices could lead to lower fuel costs for consumers, Yawger cautioned that the potential for an economic downturn could offset these savings. “The good news is prices at the pump will go down. But if we’re going into recession, you won’t be going to the pump as much,” he said, according to CNN.
