Bloodbath in oil market; crude tumbles 30%, India to gain

TIL Desk/Business/New Delhi/ The bloodbath in the oil market has continued into the new week with crude oil prices slumping to around 30 per cent on Monday to just about $30 a barrel after Saudi Arabia shocked the market by launching a price war against one time ally Russia.

Late last week, talks between oil cartel Organization of Petroleum Exporting Countries (OEPC) and Russia collapsed as the two sides failed to agree on an output cut deal. This pushed Saudi Arabia, the world”s largest oil producer, to cut its crude prices and announce increase production leading to a mayhem in an already over supplied oil market.

Crude is trading down 22 per cent to $32 a barrel. Brent crude, the global benchmark, has also plunged 22 per cent to $35 a barrel. Both oil contracts are on track for their worst day since 1991 Gulf War. US oil prices crashed as much as 27 per cent to a four-year low of $30 a barrel.

The fear in the market now is that oil prices may crash further as Saudi Arabia is taking aggressive stance and is expected to flood the market with crude in a bid to recapture market share. Analysts have said that Saudi Arabia had slashed its April official selling prices by $6 to $8 a barrel in a bid to retake market share and heap pressure on Russia.