Trump Calls on OPEC to Lower Oil Prices, Sparking Market Reactions
The U.S. President Donald Trump made waves with a direct appeal to Saudi Arabia and OPEC, urging them to reduce oil prices. Trump argued that high energy costs are fueling geopolitical tensions, particularly the ongoing conflict between Russia and Ukraine.
Speaking during a panel discussion, Trump stated, “I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil.” His comments immediately sent ripples through global markets.
Oil prices, which had been climbing steadily, reversed course following Trump’s statements. West Texas Intermediate (WTI), the U.S. benchmark for crude oil, dropped by 1.1%, closing at $74.62 per barrel. Meanwhile, Brent Crude, the global benchmark, saw a sharper decline of 3.1%, settling at $78.39 per barrel.
Market analysts attributed this drop to fears that OPEC might come under political pressure to increase production, which could ease supply constraints and drive prices lower.
Trump also tied the issue of high oil prices to the Russia-Ukraine conflict. He suggested that lowering global oil prices would weaken Russia’s ability to fund its military operations, potentially forcing an end to the war.
“If the price came down, the Russia-Ukraine war would end immediately,” he asserted. His remarks highlighted the delicate balance between energy markets and geopolitical stability.
OPEC’s Stand on Production Cuts
In recent months, OPEC and its allies, known collectively as OPEC+, have implemented measures to stabilize oil prices. The group cut production by 2.2 million barrels per day, citing reduced demand from key markets like China. These production cuts have been extended until April 2025, with plans to gradually ramp up output later in the year.
Trump’s call for increased production puts pressure on OPEC, particularly as it navigates its strategy to balance market demand and member interests.
Calls for Lower Global Interest Rates
Trump also urged central banks, including the U.S. Federal Reserve, to reduce interest rates. He argued that high borrowing costs are compounding the impact of elevated energy prices on global economies.
“Global interest rates should come down alongside oil prices,” he said, adding that coordinated efforts could relieve pressure on businesses and households worldwide.
Impact on Kenya’s Oil Market
While global oil prices often ripple through economies, Kenya remains somewhat insulated due to a government-to-government deal with three Gulf state-owned companies. The agreement, introduced in April 2023, set fixed oil prices of $90 per barrel for petrol and $88 for diesel. The initiative aimed to ease pressure on Kenya’s foreign exchange reserves.
However, the Kenyan Treasury later admitted that the deal failed to meet its objectives, instead causing market distortions. Despite the challenges, the government extended the agreement in December 2024, without specifying an end date.
As energy markets respond to geopolitical and economic pressures, the road ahead remains uncertain. OPEC’s production strategy, global interest rate policies, and conflicts like the Russia-Ukraine war are all key factors shaping the future of oil prices.
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