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Oil prices declined on Monday as investors remained wary over the potential economic fallout from U.S. import tariffs, which could slow global economic growth and weaken fuel demand. Rising output from OPEC+ producers further pressured the market, raising concerns about oversupply.
Brent crude slipped 31 cents, or 0.4%, to trade at $70.05 a barrel by 0445 GMT, following a 90-cent gain on Friday. Similarly, U.S. West Texas Intermediate (WTI) crude fell by 35 cents, or 0.5%, to $66.69 per barrel, after gaining 68 cents in the previous session. The WTI has now declined for seven consecutive weeks, marking its longest losing streak since November 2023, while Brent has seen three straight weeks of losses.
The key driver behind the decline remains uncertainty surrounding U.S. tariff policies. President Donald Trump’s imposition, delay, and modification of tariffs on major oil suppliers such as Canada and Mexico, coupled with increased duties on Chinese goods, have left the global markets uneasy. In retaliation, China has imposed tariffs on U.S. and Canadian agricultural products, adding to fears of a global economic slowdown.
According to analysts at ING, “Tariff uncertainty is a key driver behind the weakness,” noting that Saudi Arabia’s recent oil price cuts and economic deflation in China have further dampened investor sentiment. IG analyst Tony Sycamore highlighted additional factors contributing to oil price weakness, including concerns over U.S. economic growth, speculation about the possible lifting of U.S. sanctions on Russia, and OPEC+’s decision to raise production.
Despite the bearish trend, some analysts believe that oil prices may find support at around $65 to $62 per barrel before recovering to approximately $72. Investors gained some confidence on Friday after Trump stated that the U.S. would intensify sanctions on Russia if it fails to negotiate a ceasefire with Ukraine. Meanwhile, reports suggest that Washington is considering ways to ease sanctions on Russia’s energy sector if the country agrees to end the war in Ukraine.
OPEC+—a coalition of oil-producing nations including Russia—has confirmed that it will proceed with oil output hikes starting in April. However, Russia’s Deputy Prime Minister Alexander Novak has indicated that this decision could be reversed should the market become imbalanced. Additionally, Saudi Arabia announced its first price cut in three months for crude oil sold to Asian markets.
Further complicating global energy dynamics, Trump recently suggested negotiating a deal with OPEC member Iran to prevent nuclear weapons development, though Iran has insisted it is not pursuing such weapons. The U.S. has continued its “maximum pressure” campaign against Iran, including rescinding a waiver that had previously allowed Iraq to pay Iran for electricity.
These developments hold significant implications for Zimbabwe, where fuel prices are directly affected by global crude oil fluctuations. A decline in global oil prices could offer some relief to Zimbabwean consumers who have been grappling with high fuel costs. However, if OPEC+ production adjustments or geopolitical conflicts lead to price volatility, Zimbabwe may still face price shocks at the pump. Additionally, the uncertainty in global markets could impact Zimbabwe’s economy, which relies heavily on imported fuel for transportation and industrial production.
As the international energy landscape remains unpredictable, Zimbabwean policymakers and businesses must closely monitor global oil price trends to anticipate potential cost implications and ensure energy security in the long term.
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