Oil prices have tumbled amid fears of a global economic slowdown – or even recession – on the back of President Trump’s tariff war
Millions of drivers could see a silver lining from Donald Trump’s tariff war after oil prices slumped for a four-year low. Motoring group the RAC believes the sharp decline means there is “significant scope” for prices to fall at the pumps.
Any decline would benefit families and others heading out and about during the Easter holidays. It comes as fears of a global recession stoked by escalating trade tensions have triggered a sharp drop in the traded cost of crude oil. Traders are speculating that an economic slowdown with dent demand, with oil prices declining to $64 a barrel on Monday.
Simon Williams, the RAC’s head of policy, said: “With oil tumbling to its lowest price for four years, drivers ought to see cuts of up to 6p a litre at the pumps ahead of the notoriously busy Easter weekend on the roads. As long as the barrel carries on trading around or below the $65 mark, retailers will be obliged to pass on the savings they’re benefitting from to their customers on the forecourt.”
He went on: “Petrol should drop from its current UK average of 136p to 130p a litre and diesel from 143p to 137p. If unleaded were to fall to that level, it would be the cheapest since summer 2021. Diesel hasn’t been that low since September that year.”
Oil prices fell further on Monday, having tumbled 7% on Friday as China ramped-up tariffs on US goods, escalating a trade war that has led investors to price in a higher probability of recession. Wall Street bank Goldman Sachs has forecast a 45% chance of recession in the US over the next 12 months and made downward revisions to its oil price projections. Fellow big bank Citi also cut its Brent crude outlookm, while JPMorgan said last week that it saw a 60% probability of recession in the US and globally.
Saudi Arabia on Sunday announced sharp cuts to crude oil prices for Asian buyers, dropping the price in May to the lowest level in four months.
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The DVLA’s new car regulations will lead to some drivers paying significantly more each year, depending on the vehicle. Ths includes a new standard road tax rate, fresh taxes for electric vehicles (EVs), increased levies for low-emission vehicles and a doubling of first-year rates for high-polluting new cars.
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Imports of oil, gas and refined products were given exemptions from President Trump’s sweeping new tariffs, but experts reckon the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices. Jerome Powell, chair of America’s Federal Reserve, said the President’s new tariffs are “larger than expected” and the economic fallout is likely to be so, too.
The OPEX+ club of major oil producing countries have also decided to advance plans to increase output, potentially putting a further downward pressure on prices.
A drop in fuel prices will be welcome given they had been on the rise. According to breakdown giant the AA, the average for unleaded reached 135.4p a litre last week, with diesel at 142.2p.
Most commodities, including metals and coffee, have fallen as the intensifying trade war between the US and China triggered worries over demand for raw materials. Gold, which hit a record peak last week, also fell amid a wider market sell-off.
