An Oil Price Crash for the History Books

This week saw oil prices tank more than 10% as President Donald Trump’s tariffs went into effect. A single-day drop of more than 7% in global oil prices is rare but not unheard of.

It usually signals something dramatic: the spectre of war (directly involving the U.S.), pandemics, cartel infighting, or, in this case, the first new salvo in a brewing global trade war.

We have been here before, and not that long ago. In fact, we have been here, exactly, during Trump’s first crack at the tariff arena.

We count six incidents/events that led to single-day oil price crashes of >7% just since mid-2020.

August 1, 2019 – Trump’s Tariff Threat (-7.9%)WTI: -7.9% | Brent: -7.0%

President Trump had tweeted out a new 10% tariff on $300 billion of Chinese imports, cratering oil prices as the markets panicked over trade war escalation and a global demand slowdown. They would learn in his second term that they had seen nothing yet.

March 9, 2020 – The Price War Meltdown (-24.6%)

WTI: -24.6% | Brent: -24.1% ($34.36)

This was the granddaddy of all plunges. After OPEC+ talks fell apart, Saudi Arabia and Russia launched an oil price war just as the COVID-19 pandemic was going global. Crude fell, hard. WTI crashed 24.6% in a single day, marking the second-largest one-day percentage drop in history.

April 20, 2020 – Below Zero (-305%)WTI: From $18.27 to -$37.63 Brent: $25