ISLAMABAD: The international oil market has experienced a major downturn which has caused crude oil prices to decrease after undergoing rapid price increases. After this development, petrol and diesel prices in Pakistan are expected to decrease as well.
The price of crude oil increased to $120 per barrel on Monday before President Donald Trump declared that the Iran war would end within a short time. The price of crude oil started to drop after Trump announced that the military objectives of the war had been achieved and the conflict would end soon. The stock market recorded an upward movement after experiencing a previous period of downturn.
The price of crude oil declined from $120 per barrel to $78 per barrel within a few hours. The global market experienced an oil price decline after Trump made his announcement about the war although he did not specify when the conflict would end. Any interruption of oil tanker operations through the Strait of Hormuz would result in Iran’s Revolutionary Guards facing a strong military response, according to his warning.
New York market oil prices continued their downward trend. The Prime Minister Shehbaz Sharif has informed the nation during his address on March 9 that the government would be reducing the prices of petrol and diesel according to the changes in the prices of oil globally.
The prices of oil increased rapidly over the period between March 6 and March 9, causing the Brent crude oil price to reach $120 on March 9. The prices of oil began to fall after the statements were made by Trump, causing the oil prices to fall by 17%, which occurred on March 10. The Brent crude oil price currently stands at $83, while the West Texas Intermediate WTI stands at $78.
However, experts believe that the falling oil prices are just the same as the rising oil prices, which were experienced in the past. The situation in the Strait of Hormuz has not changed, with Saudi Arabia announcing the formal reduction in the production of oil by several million barrels on a daily basis. The Arab countries have also decreased the production of oil, and Qatar has decreased the production of gas.
As of now, the only significant reaction to Trump’s announcement has come from the Iranian Revolutionary Guards, who have stated that they will not allow any oil tankers to pass through the Strait of Hormuz.
