Oil posted a third steep decline — with the US benchmark falling below $60 a barrel — as another plunge across financial markets was compounded by Saudi Arabia making some of the biggest cuts in years to its flagship oil price. 

The plunge in just a few days is threatening the coffers of oil-producing nations that need far higher prices to meet their budgets. At the same time, it will take some of the sting out of inflationary pressures from Donald Trump's tariffs on trade partners.

Oil major BP Plc's shares have declined as much as 20% in three trading sessions while companies across the US shale patch have been battered. 

Over the weekend, Saudi Arabia slashed the price of its key Arab Light crude to Asia — the top market — by the most since 2022, adding supply concerns to a deteriorating demand outlook. The kingdom's price move was bigger than traders expected, and came atop a surprise output hike from Saudi-led OPEC+ last week.

"The overarching theme is the fear of weaker demand and stronger supply," said Ole Hvalbye, commodities analyst at SEB AB. "The escalating trade war has raised concerns about a potential global recession, leading to weaker demand, compounded by the surprisingly large output hike from OPEC+."

There was little sign of bullish relief across markets on Monday as a retreat from global equities gathered more momentum with President Trump's tariff policy sparking worries about growth. The measures could endanger 1.1 million barrels a day of worldwide consumption, consultant Energy Aspects estimated. 

A confluence of pessimism has brought crude futures to levels not seen for four years. Benchmark Brent futures are trading below $63 a barrel and shed more than 10% last week. They were down another 4.7% at one point on Monday. West Texas Intermediate, which plunged below $60 earlier in the day, recovered back above that threshold.

Source: Bloomberg