On Thursday, crude prices faced a significant downturn, dropping by over 6%—the most substantial decline in roughly three years.
The initial strike happened on Wednesday following President Donald Trump’s announcement of tariffs.
The response I'm observing is one of relief as oil and gas seem to mostly avoid being targeted," said Mark Finley, a nonresident fellow in energy and global oil at Rice University’s Baker Institute, to the Reporter-Telegram. However, he noted that this may still be uncertain due to the rapid changes in tariff plans.
West Texas Intermediate fell $5 to $66.95 on Thursday due to worries about potential tariffs and counter-tariffs that might reduce demand.
The second blow came when OPEC+ announced plans to accelerate its phasing out of voluntary production cuts, saying it will pack three months of increase — 400,000 barrels — into the month of May.
"I think the timing of that announcement is quite intriguing," he stated.
The quick negative response "suggests that individuals are concerned about the near-term economic forecast and a potential downturn," according to Finley.
He stated that when all these elements are brought together, "it creates a challenging atmosphere at present."
S&P Global Commodity Insights analysts presented a pessimistic forecast for Dated Brent—the basket of six crude oils, which includes WTI Midland and makes up Platt’s—part of S&P Global’s international standard.
Although S&P Global analysts indicate that the ambiguity around compensation strategies for OPEC+ nations creates confusion, they also state with more clarity that "Saudi Arabia—and probably the UAE and Kuwait—have the ability to benefit from this scenario."