With the escalating US-China trade war and the recent attack on Saudi Arabia as of current, the global benchmark Brent’s oil prices dropped 8.7%. This drop below $60 is considered to be the worst quarterly drop following the fourth quarter of 2018, where prices plunged 35%.
The attack on Saudi Arabia’s Aramco halved the kingdom’s oil output. Consequently, oil prices spiked. Surprisingly enough, the predicted months-long repair only took a few weeks. The state-owned oil company is already back on the oil level production of 11.3 million barrels per day, its production capacity before the September 14 attack. Aramco’s speedy recovery is then affecting oil prices, nullifying the gains from the recent price hike. According to Saudi’s Crown Prince Mohammed bin Salem, if the tension in the Middle Eastern region continues to escalate the oil prices can reach “unimaginably high numbers.”
The US-China trade war gets even more intense as sources found that the Trump administration plans on instituting even more extreme measures aimed at China. The said plan includes placing limits on American investments in China as well as delisting Chinese companies from the US stock exchange. As of today, China remains the largest importer of crude. If the said plan is pursed, it effectively lessens the likelihood of any probable crude oil trade.
