Brent crude oil records the lowest price for the first time in four years as the price fell to $65.58 per barrel on Friday.
The worldwide oil benchmark fell by 7 per cent to trade at $65.58, making it lowest since April 2021.
The United States West Texas Intermediate (WTI) also fell by 7.35 per cent to 62.03 per barrel.
WHY THE DROP
The price of the crude oil dropped following China’s increased tariffs on US goods in a retaliatory move, sharply intensifying a global trade war that has investors worried about a recession.
President Donald Trump, on April 2, announced sweeping global tariffs on all imports into the US, imposing 14 per cent on Nigeria.
The approach described as “Liberation Day,” is intended to counteract what Trump’s administration sees as unfair trade practices.
Trump on Wednesday announced new blanket tariffs of 10 per cent on most imports to the U.S., with higher penalties based on trade deficits for many countries.
Meanwhile, Ngozi Okonjo-Iweala, the Director-GeneraI of the World Trade Organisation (WTO), diclosed the recent tariffs announced by the US will have significant implications for global trade and economic growth prospects.
The drop in oil prices also follows an increase in oil production by the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+).
What Oil alliance says
The oil alliance has concluded to increase oil production by 411,000 barrels per day (bpd) in May.
This was as a result of eight member countries’ decision to phase out oil output cuts.
The current oil price is lower than Nigeria’s 2025 budget target of $75 per barrel.
