Global oil prices fell on Monday to their lowest levels since 2021, affected by the escalation of global trade tensions, the increasing fears of widespread economic stagnation, after the administration of US President Donald Trump imposed new customs duties on dozens of countries, and escalatory reactions from China.
According to market data, Brent crude futures decreased or 1.2% to $ 64.80 a barrel by 14:49 GMT, while West Texas Intermediate crude contracts fell 1.2% to $ 61.24 a barrel.
The two crudes have been going to register their lower closure since April 2021, according to Reuters.
Acute fluctuations and conflicting statements
During the session, the oil markets witnessed remarkable fluctuations, as prices fell by more than $ 3 during night trading, before they temporarily rise by more than a dollar on Monday morning, after unconfirmed reports stated that Trump is studying the suspension of customs duties for 90 days on all countries except China.
However, the White House denied this news and described it as “false”, according to statements by his spokeswoman, which was reported by Reuters.
Europe adheres to diplomacy
On the other hand, Maros Civkovic, the European Union Trade Commissioner, said during a press conference in Brussels that the Union is still hoping to reach a trade agreement with the United States.
“Urgent or later, we will sit at the negotiating table with Washington and reach a compromise that serves both parties,” he added.
In a recent research note, Goldman Sachs expected the possibility of economic recession in the United States by 45% in the next 12 months, noting that the American fees and their repercussions on global consumption will directly affect energy demand.
Saudi Arabia reduces export prices
In a remarkable step, Saudi Aramco announced on Sunday a sharp reduction in the prices of selling crude oil to Asian customers, which led to a decrease in the official sale price for May to its lowest level in 4 months.
Tamas Varga, an analyst at the PVM company, said this step reflects the Kingdom’s expectations for a decrease in global oil demand in light of customs duties and potential economic slowdown.
He added: “The Saudis are behaving based on their historical experience.”
Chinese escalation and possible repercussions
In response to Washington’s procedures, the Chinese Finance Ministry announced on Friday that it will impose additional customs duties of 34% on the imports of American commodities, which strengthened market fears about the outbreak of a comprehensive trade war, and the possibility of the global economy being exposed to an inflationary stagnation.
Despite the exception of oil, gas imports and refined products from the American package, commercial tensions raise fears of increasing inflation and slow global growth, keeping oil prices under pressure, according to economic observers.
In another development, the OPEC Plus coalition announced that it moved in the plans to increase production by 411 thousand barrels per day in May, exceeding the previous increase, which was scheduled for 135 thousand barrels per day, which contributed to enhancing the pressure of supply on the market in light of the weak demand.
