Crude oil prices stabilise after sharp decline, further downside risk remains

Global crude oil prices have plunged, falling sharply to nearly $60 per barrel from around $75 just a week ago. A combination of US President Donald Trump’s trade war rhetoric, growing recession fears in the US, and weak global demand has weighed heavily on oil markets.

Christopher Haines, Head of Oil at Energy Aspects, believes further declines may be on the cards, pointing to the prevailing “uncertainty” around trade tariffs.

“Nobody really knows how much these tariffs are going to stick, how long they are going to stick for, what levels they are going to stick for, if they get changed at all. I think that just creates a really bad environment in general for business,” he said.

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Haines added that the full impact of existing tariffs hasn’t been fully factored in yet. If the US administration doesn’t revise its current stance, oil prices could slide even further, he warned.

He also flagged a major risk to domestic output: a sustained drop in US crude prices to around $60 or below could pose a “massive threat” to American oil production, which is already grappling with rising costs.

Over the past week, crude prices have tumbled by 15%, while natural gas prices have also declined in double digits. Reflecting the bearish sentiment, Goldman Sachs, Citi, and Morgan Stanley have all lowered their 2026 oil price forecasts.

Meanwhile, in the edible oils market, a narrowing price gap between palm and soybean oil has shifted the outlook for Indian buyers. Sandeep Bhan, CEO of SD Guthrie International Trading, highlighted the improving economics for palm oil.

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“The silver lining is that palm prices over soybean oil prices spread has narrowed down…that makes India come back to the palm oil market,” he said.

With palm oil becoming more competitive, Bhan noted that India has resumed aggressive forward buying. “We should see India back into the palm oil, and in a big way. We should see from 400,000 metric tonne back to 500,000-600,000 metric tonne, if palm maintains its at par price with soybean oil,” he added.

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